Cronos Reports $9.1 Million in Unrecovered Funds After Tectonic Exploit

Cronos has confirmed that there is still $9.1 million (roughly Rs. 87.1 crore) that cannot be recovered following the theft of $120.4 million (roughly Rs. 1,141 crore) by the hacker from Tectonic, while roughly $111.2 million (roughly Rs. 1,054 crore) has been reversed with the help. According to a post-mortem report released by Cronos on Monday, the attacker tampered with the price of TONIC, which is the governance token of the lending protocol Tectonic, and utilised the overvalued token to borrow funds in nine markets on August 30.

Cronos Rollback Reversed Nearly Two Hours of Blockchain Activity

The assault resulted in the validators of Cronos stopping the Layer 1 chain at block 90,907,150 before deciding to bring back the network to block 90,896,188, the last block generated prior to the exploit. The rollback restored balances to what they were before the attack and reversed roughly $111.2 million (roughly Rs. 1,054 crore) out of the $120.4 million (roughly Rs. 1,141 crore) that were part of the hack. Yet, any money that had been transferred from Cronos was beyond the reach of this recovery process.

In total, 10,961 blocks were removed by the rollback, equaling 1 hour 54 minutes of Cronos blockchain transactions. No matter if the transaction was involved in the Tectonic exploit or not, all transactions carried out during that period got reversed.

Cronos said that validators had to consider transaction irreversibility vs the funds at risk in order to decide how to start up the blockchain network. “It was a hard decision, taken together with the validators, weighing the finality users expect from a chain against the funds at risk [...] The alternative, restarting without restoring state, would have left the borrowed assets in the attacker's control,” Cronos said. 

However, the accounting done finally increases the value considerably in comparison to early estimates done just after the occurrence. The halt of Cronos occurred following an on-chain researcher, Weilin Li, estimated that around $75 million (roughly Rs. 711 crore) had been affected. In Li's preliminary research findings, he discovered that most of the detected funds stayed within Cronos after the validators ceased producing blocks, with an estimated $6 million (roughly Rs. 56 crore) of those making their way to Ethereum. Neither Tectonic nor Cronos had conducted an audit on the funds in question at that point.

The number of crypto hackings rose sharply in August, according to a blockchain security company, PeckShield. On September 1, the security company stated that it had identified 50 hackings in August, which is a rise of 67 percent from the 30 instances seen in July, according to a report. The estimated loss amounted to $136.3 million (roughly Rs. 1,292 crore), which is 49.5 percent lower than the $270 million (roughly Rs. 2,560 crore) in July.