Orbit Bridge Attack Triggers Huge Losses in Year End Surprise

Just a few hours before the new year, 2023 recorded another security breach that led to the loss of millions of dollars. Cross-chain bridge protocol Orbit Bridge was exposed to a major attack that saw some unauthorized movement of different cryptocurrencies out of its wallet. In five separate transactions, the hacker moved $50 million in stablecoins from the protocol to five different wallets.

The siphoned assets were 30 million Tether (USDT), 10 million DAI, 10 million USDC, 231 wBTC (worth about $10 million), and 9,500 Ether (ETH) valued at about $21.5 million. Altogether, the loss was estimated to be around $82 million. The hack was discovered by one X user identified as Kgjr.

Ongoing Investigation of Orbit Bridge 

In the meantime, the exact nature of the hack is yet to be known but investigations are currently ongoing in alliance with international enforcement agencies. It appears that the bridge is closely related to the Klaytn ecosystem. The Klaytn explorer indicated that 9 out of the top 10 tokens on the network by circulating market capitalization are Orbit Bridge-wrapped assets. 

“An unidentified access to Orbit Bridge, a decentralized Cross-chain protocol, was confirmed on Dec-31-2023 08:52:47 PM +UTC. Further information regarding the issue will be updated,” Orbit informed its users on X. “A comprehensive analysis identifying the root cause of this issue is being carried out with Theori. We are actively engaging with international law enforcement agencies.”

Crypto Attack Declines in 2023

Attacks on cryptocurrencies have become prevalent in the crypto space. These bad actors explore all avenues to exploit vulnerabilities and loopholes in any system. While 2023 had its fair share of scams and hacks, the figure reported is a significant dip from that of 2022. 

Only about $1.7 billion was recorded from crypto scams, rug pulls, and hacks in 2023 compared to 2022 when it was around $4 billion. By the beginning of the second half of 2023, the crypto industry had suffered huge losses of around $656 million from hacks.

Crypto Regulation to Curb Attacks

Such incidents are at the core of government authorities’ move to push out the crypto regulatory framework for every business interested in engaging with cryptocurrencies. In 2023, a number of governments worked on releasing crypto regulation guiding their respective jurisdiction.

The European Union came up with the Market in Crypto Assets (MiCA) regulation. Similarly, the G20 nations outlined recommendations for their crypto regulation. It is likely that many of such regulations will be introduced in 2024 and much more curb the activities of these bad actors.