The Holograph token, HLG, experienced a significant drop in value by almost 80% due to a recent exploit. The exploit occurred when a malicious actor took advantage of a vulnerability in the protocol’s operator contract, allowing them to mint 1 billion HLG tokens. Initially valued at $14.4 million, the hacker quickly started converting the tokens into Tether, resulting in a current value of just over $7 million.
The breach was confirmed by Holograph on their official account, with reassurances that the exploit has been patched and efforts are being made to freeze the hacker’s accounts with the help of cryptocurrency exchange partners. The team has also initiated an investigation and is cooperating with law enforcement to address the situation.
The attack began on June 13 at 9:47 am UTC, with the attacker minting the tokens in nine transactions using a smart contract vulnerability. The rapid conversion of HLG tokens into Tether caused the token price to plummet within just 10 minutes of the attack starting. The value dropped from $0.014 to a low of $0.0029, resulting in a 79.4% decline. The market capitalization of HLG also decreased significantly during this period.
On-chain data has identified the ENS wallet acc01ade.eth as being linked to the exploit. Cryptocurrency researcher Matt Casto suggested that the hacker may have been a “rogue dev” who had been preparing for the attack for nearly a month. This incident has raised concerns about the security of tokenization platforms like Holograph within the Omnichain ecosystem, which aims to facilitate tokenization, interoperability, and asset transfers across different EVM blockchains.
Despite the significant drop in value, the HLG token has managed to make a slight recovery following the exploit. Investors and users of the platform are advised to exercise caution and stay updated on any developments regarding the security of their assets.