Harmony is working to contain a major blockchain incident after an alleged exploit enabled a hacker to mint nearly 4 billion ONE tokens, equivalent to around 26% of the token’s total supply. The company is working with cryptocurrency exchanges to block suspicious transactions while exploring options to roll back affected transactions.
The layer-1 blockchain said it was developing an emergency patch to prevent further unauthorised minting. Harmony has also stopped its token bridge, while exchanges have frozen funds linked to 4 addresses.
“We are working on a patch and rollback options,” Harmony said, adding that it would provide another update as more information becomes available.
The company later said it had traced 10288 transfers across 409 wallets where the allegedly fraudulently minted tokens had been transferred. Harmony also alerted exchange partners about hundreds of suspicious deposit transactions, leading to the blocking of the suspected hacker’s wallets.
At the time of the update, 53% of Harmony validators had completed the emergency software upgrade, which had been released 4 hours earlier.
The incident also triggered a sharp decline in the value of ONE. The token’s price fell nearly 40% following the attack, with the newly minted amount representing more than a quarter of its existing supply.
Harmony is a layer-1 blockchain designed for decentralised finance protocols and marketplaces. Its native ONE token is used to pay transaction fees and help secure the network.
Before the exploit, around 15 billion ONE tokens had been issued. The additional issuance of nearly 4 billion tokens therefore represents an increase of about 26%.
Harmony was previously targeted in a major crypto exploit in 2022. A North Korean hacking group known as the Lazarus Group was suspected of being behind the theft of around $100 million, roughly ₹953 crore, from Harmony’s Horizon bridge.
The attackers reportedly stole several cryptocurrencies, including Wrapped Ethereum, Tether (USDT) and USD Coin (USDC), before converting them into Ethereum.
Harmony was valued at around $4 billion, roughly ₹38,136 crore, in January 2022 at the height of its market value.
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