ECHO Token Crashes Double Digits After Massive Echo Protocol Exploit

Echo Protocol halted cross-chain transactions while investigators examined the massive exploit.

Bitcoin-focused DeFi protocol Echo Protocol was exploited on Monday in the latest security breach to hit the DeFi sector this month. The attack was first flagged by pseudonymous crypto influencer DCF GOD on X at around 5:55 p.m. ET.

The exact cause of the incident has not yet been identified.

Echo Protocol Exploit

Findings by Onchain Labs reveal that the attacker allegedly minted 1,000 eBTC worth about $76.7 million and then used what was described as a previously tested exploit route involving Curvance. The exploiter reportedly deposited 45 eBTC, roughly worth $3.45 million, into Curvance as collateral before borrowing around 11.29 WBTC worth about $867,700.

The borrowed WBTC was then bridged to Ethereum, swapped into ETH, and 385 ETH, which is valued at around $818,000, was later sent to Tornado Cash.

Keone Hon, co-founder of Monad, later clarified that the Monad network itself was not impacted and continues to operate normally. Additionally, Curvance also stated that its smart contracts showed no signs of compromise and explained,

“Due to Curvance’s fully isolated market architecture, no other markets are impacted. Out of an abundance of caution, the affected market has been paused while our team actively investigates the situation alongside ecosystem partners.”

The hacker still holds approximately 955 eBTC worth more than $73 million, according to data shared by blockchain tracker Lookonchain. Meanwhile, Echo Protocol confirmed that they are currently investigating the security incident and have suspended all cross-chain transactions.

ECHO Token Drops 12%

Following news of the exploit, ECHO came under heavy selling pressure and fell more than 12%. At the time of writing, the token was trading near $0.0049.

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The Echo exploit followed two other major crypto hacks within four days, including attacks on THORChain with stolen funds of more than $10 million and the Verus-Ethereum Bridge, which saw $11.5 million being stolen. Overall, the Echo exploit has pushed the total number of security breaches recorded in May to 14.