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Cosmos Hub restarts after Neutron-linked ATOM governance exploit
Validators resumed block production Sept. 23 and moved 1,227,121.37 ATOM, about $2.2 million, to a recovery address, but 168,990.9 ATOM still reached the attacker after the restart.
Cosmos Hub restarted after a nearly day-long halt to secure assets bridged from Neutron following a governance exploit, according to CryptoSlate. Validators resumed block production on Sept. 23 after stopping the network a day earlier, with the first block transferring 1,227,121.37 ATOM, valued at about $2.2 million, from an attacker-linked address to a recovery path before ordinary activity continued.
Cosmos Hub said its network was not exploited, and the halt was intended to prevent bridged funds from moving further. The upgrade transferred the attacker-linked balance into a recovery address, and the secured assets were later placed in a community validator multisig while participants coordinated a return.
A former Neutron contributor, Spaydh, said the attack began after an attacker built enough NTRN voting power to pass an expedited governance proposal that reassigned administrative rights over 11 smart contracts. CryptoSlate reports that the affected contracts, including infrastructure used by Astroport and Drop, were migrated to malicious code that allowed assets to be withdrawn, and Spaydh estimated the initial impact at about $4.4 million across ATOM, USDC, DYDX, and smaller amounts of wstETH and WETH.
Even with Neutron rate limits and the Cosmos halt, not all funds were recovered. Crypto analyst Rarma said 168,990.9 ATOM arrived at the attacker-linked address seven blocks after the restart, where the tokens remained for almost six hours before being transferred to Osmosis and sold in batches for about 266,841 USDC, with much of the proceeds later converted into Ethereum. CryptoSlate also notes that a later refund from THORChain reached the attacker after the recovery transaction had already executed.
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