The Terra blockchain, victim of a hack worth over $4 million, had to stop for an emergency update. After a few hours of downtime, it was finally restarted. What happened?
Infamous Terra blockchain hit by security breach
This morning, the infamous Terra (LUNA) blockchain found itself in turmoil again. Via its official account on X, it announced to its users that Blockchain reportedly shut down to fix security flaw :
📣Attention Terra users: Please be advised that the chain will be halted shortly at block height 11430400 and transactions will not be processed during this time.
We will be working with the validators on Terra (phoenix-1) to apply an emergency patch thereafter to remediate a…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) July 31, 2024
However, this is not the first time that the Terra blockchain has had its troubles. In January 2024, the company Terraform Labs announced that it was bankrupt, more than 2 years after the explosion of the Terra ecosystem. Following an agreement with the United States Securities and Exchange Commission (SEC), it was also forced to pay a fine of $4.5 billion to the regulator.
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Yet it was not the SEC that caused harm to the Terra blockchain today, but a security flaw, yet known.
Some time after Terra's announcement, on the social network X, Beosin, a company specializing in blockchain analysis, reveals the origin of the breach and the amounts stolen :
Terra blockchain was operated for ~60M $ASTRO3.5M $USDC500k $USDTand 2.7 $BTC.
The attacker exploited a reentrancy vulnerability in the timeout callback of ibc-hooks. The vulnerability was disclosed in April this year:https://t.co/CY39X28KyE https://t.co/hY9xA40hbJ
— Beosin Alert (@BeosinAlert) July 31, 2024
This is how it is 60 million ASTRO, 3.5 million USDC, 500,000 USDT and 2.7 Bitcoin which were stolen according to Beosin. Over the past 24 hours, the ASTRO token consequently shows a drop of 22%.
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The hack could have been avoided because the flaw was known
Although some flaws are sometimes difficult to predict, it seems that this one could have been avoided.
Indeed, Beosin tells us that the flaw comes from the Inter-Blockchain Communication (IBC) protocol of the Cosmos ecosystem. This fault had been corrected during the month of April on Cosmosbut had not been introduced during the June update of Terra.
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At any rate, After performing an emergency update, the Terra blockchain is back up and running. The majority of Terra validators have already updated their nodes to protect themselves from a new attack.
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Passionate about the blockchain ecosystem, I like to deepen my knowledge and share my discoveries. In a perpetual quest to learn more about cryptos, I recently joined the Cryptoast Research team where I provide weekly fundamental analysis.
Theo Zananiri
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