Cronos blockchain restarts after $74 million Tectonic exploit

The Cronos blockchain network has resumed trading activity after a price-manipulation attack on the Tectonic cryptocurrency lending platform allowed an attacker to borrow $74 million.

According to current information, the threat actor artificially inflated the price of Tectonic’s TONIC token by 100 times, then used it as collateral to borrow real assets. The price manipulation happened in 20 minutes.

Despite the massive amount the exploit generated, the attacker only managed to steal roughly $6 million worth of Ethereum, the rest of the funds being “stuck” on Cronos, says blockchain security and data analytics company PeckShield.

Cronos is an Ethereum-like blockchain network associated with Crypto.com, while Tectonic is a decentralized finance (DeFi) lending app running on Cronos.

Tectonic, which was Cronos’ largest lending protocol before the incident, holding $122 million, allows users to deposit cryptocurrency and borrow against assets they provide as collateral.

After the incident, the total value locked according to DeFiLlama is just under $3 million.

Yesterday, Tectonic announced that it was investigating an incident and advised users not to interact with the protocol until the platform publicly confirmed that it was safe to do so.