Holograph, a blockchain tokenization platform, experienced a significant drop in the value of its native token, HLG, following a cyber attack where a malicious actor hacked the protocol’s operator contract and created 1 billion HLG tokens valued at $14.4 million.
The hack was confirmed by Holograph’s X account on June 14, and the team immediately took steps to patch up the initial exploit. They are also collaborating with cryptocurrency exchanges to freeze the accounts of the malicious actor. Additionally, Holograph has initiated its own investigation and has informed law enforcement about the incident.
The hacker minted the 1 billion HLG tokens in nine transactions, exploiting a smart contract vulnerability. The first mint occurred on June 13 at 9:47 am UTC, as reported by Etherscan. Subsequently, seven transactions were made in batches of 100 million tokens each.
The price of HLG plummeted within hours of the exploit, dropping 79.4% from $0.014 to $0.0029, causing the market cap to decrease from $22 million to $4.8 million. Currently, HLG’s price has slightly recovered to $0.008, making the 1 billion tokens worth $7.4 million.
The hacker began converting the minted HLG tokens into stablecoin Tether (USDT) shortly after the exploit. Matt Casto, a cryptocurrency researcher at CMT Digital, believes the hacker may have been a “rogue dev” who funded Holograph’s operator contract address 26 days prior to the attack.
Holograph, part of the Omnichain ecosystem, facilitates token movement across blockchains while maintaining the same contract address, allowing for the indexing of cross-chain data. The platform has received investments from notable firms such as Animoca Brands and Mechanism Capital.
According to a recent report by Crystal Intelligence, nearly $19 billion worth of cryptocurrencies have been stolen since the first industry hack in June 2011. The incident with Holograph underscores the ongoing challenges faced by the crypto industry in terms of security and resilience against cyber attacks.