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AFX Trade loses $24.15M in USDC after bridge validator keys compromised

The attacker used five hot-validator signatures to approve a withdrawal, then moved the USDC to Ethereum and swapped for about 12,467 ETH.

Reported · Written up by our desk · Market Structure

AFX Trade, a decentralized perpetuals exchange that settles in USDC on Arbitrum, was drained of about $24.15 million after attackers compromised validator signing keys for a bridge the protocol uses, blockchain data reviewed by CoinDesk shows.

CoinDesk reports that Arbitrum’s native bridge was not breached, and security firm Blockaid said the on-chain logic functioned as designed. The withdrawal was approved when five hot-validator signatures, which cleared the bridge’s required quorum, authorized the transfer of 24,150,000 USDC to the attacker’s wallet.

After the theft, the attacker moved the stolen USDC to Ethereum and swapped it for roughly 12,467 ETH, nearly emptying AFX’s total value locked, CoinDesk said.

Arbitrum developer Offchain Labs co-founder Steven Goldfeder said the Arbitrum native bridge has not been hacked or exploited and that the transaction originated from a third-party protocol, CoinDesk reports, framing the incident as an off-chain key compromise rather than a smart contract exploit.

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