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Cronos halts blockchain after $75 million Tectonic lending exploit
Tectonic’s total value locked fell from about $121.7 million on Aug. 26 to roughly $3 million by Monday, after an attacker allegedly manipulated TONIC prices as collateral.
CoinDesk reports Cronos halted its blockchain Sunday after an attacker exploited the Tectonic lending app, with the incident estimated at about $75 million. The shutdown follows an alleged manipulation of the thinly traded TONIC token price, which was then used as collateral to borrow other assets.
According to the report, Tectonic’s total value locked dropped sharply, falling from about $121.7 million on Aug. 26 to roughly $3 million by Monday, citing DefiLlama data. Cronos and Tectonic had not provided a restart timetable or confirmed losses as of Monday morning, the outlet said.
Cronos, launched by Crypto.com in 2021, is tied to the exchange and runs cheaper transactions for Crypto.com products. Tectonic is described as the biggest lending platform on the Cronos chain, where users deposit crypto and borrow against it, similar to using property as collateral for a loan.
The report says one collateral asset accepted was TONIC, which had about $1.34 million of liquidity and roughly $11,000 of daily trading volume. It adds that the protocol had a 20% collateral factor and that blockchain data showed TONIC’s price was pushed up about 100-fold in roughly 20 minutes, enabling the attacker to borrow real assets against inflated collateral.