The Shibarium bridge, connecting the Layer-2 network to Ethereum, has been targeted in a sophisticated attack resulting in the loss of approximately $2.3 million in ETH and SHIB. The exploit, executed using a flash loan, allowed the attacker to gain temporary control over the network's validators.
Key Takeaways
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An attacker exploited the Shibarium bridge using a flash loan, stealing around $2.3 million.
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The attacker gained control of 10 out of 12 validator keys by borrowing 4.6 million BONE tokens.
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Stolen assets include ETH, SHIB, and KNINE tokens, with other ecosystem tokens also affected.
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Shibarium has suspended staking functions and is investigating with security firms.
The Attack Mechanism
The attacker reportedly used a flash loan to acquire 4.6 million BONE, Shibarium's governance token. This allowed them to temporarily gain significant voting power and compromise 10 out of the network's 12 validator keys. With this control, the attacker was able to manipulate the consensus mechanism and drain 224.57 ETH and 92.6 billion SHIB from the bridge's smart contract.
Additionally, tokens from the K9 Finance DAO project, KNINE, valued at approximately $700,000, were also stolen. The Shiba Inu team indicated that other tokens, including LEASH, ROAR, TREAT, BAD, and SHIFU, were affected but have not yet been moved or sold.
Shibarium's Response and Recovery Efforts
Following the incident, the Shibarium team took immediate action:
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Suspended deposit and withdrawal functions for staking.
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Transferred remaining funds to a secure, multi-signature hardware wallet.
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Initiated a joint investigation with security firms Hexens, Seal911, and PeckShield.
The team clarified that the 4.6 million BONE tokens used in the exploit remain delegated to validators and are effectively frozen, preventing the attacker from accessing them. Furthermore, the K9 Finance DAO has blacklisted the attacker's address, blocking the sale of stolen KNINE tokens.
Shibarium plans to return validator keys to legitimate holders once network integrity is confirmed, restore staked funds, and continue collaborating with partners to freeze related assets. A comprehensive incident report is expected upon completion of the investigation.
Market Reaction
Despite the exploit, the price of BONE saw a significant surge of around 40% in the aftermath, while SHIB experienced an increase of over 8%. This price action occurred as the attacker's control over the BONE tokens was temporary and the stolen assets were largely unrecoverable by the attacker.
Sources
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