Fraudsters steal $6 million from Tectonic crypto platform after inflating token price

At least $6 million was stolen from crypto platform Tectonic after an attacker manipulated the price of the Tonic coin over the weekend. 

The decentralized lending platform confirmed on Sunday morning that it was dealing with a security incident, and the public blockchain Cronos halted activity to prevent an outflow of stolen funds. 

The fraudsters were able to jack up the price of Tectonic’s thinly traded coin to more than 100-times its original price in the span of 20 minutes. They then used the Tonic tokens, with their newly inflated price, as collateral in order to borrow assets against them — attempting to make off with an estimated $74 million, according to blockchain security firms.  

While more than $6 million left the platform, about $68 million was stopped from leaving and is still on the Cronos blockchain. 

Kris Marszalek, CEO of Crypto.com — the company behind Cronos — said they are assisting in the investigation and noted their platform was not affected by the incident. On Monday, Cronos explained that it is back online and told customers that it made the emergency decision to shut the platform down “to protect users from an exploit on the Tectonic protocol.”

“This was deemed necessary as it protected users from being exposed to this exploit,” Cronos CEO Ryan Wyatt said.