The native token of the blockchain tokenization platform Holograph, HLG, experienced a significant drop of 79.4% after a hacker exploited the protocol’s operator contract and generated 1 billion HLG tokens valued at $14.4 million. The hack was confirmed by Holograph’s X account on June 14, prompting immediate action to address the exploit and collaborate with cryptocurrency exchanges to freeze the hacker’s accounts.
Following the incident, Holograph initiated its own investigation and reached out to law enforcement authorities to address the breach.
The hacker managed to mint 1 billion HLG tokens through nine transactions, exploiting a smart contract vulnerability. The first mint occurred on June 13 at 9:47 am UTC, as reported by Etherscan. Subsequently, the hacker sent seven transactions in batches of 100 million tokens each. The price of HLG plummeted within 10 minutes of the exploit, dropping by 79.4% from $0.014 to a low of $0.0029 in nine hours. The market cap of HLG also decreased from nearly $22 million to $4.8 million during this period, according to data from CoinGecko. The token has since recovered slightly, reaching $0.008.
As of now, the 1 billion HLG tokens are valued at $7.4 million, with the hacker already converting some of the tokens into Tether (USDT) shortly after the exploit.
Cryptocurrency researcher Matt Casto from CMT Digital suggests that the hacker may have been a “rogue dev” who funded Holograph’s operator contract address 26 days prior to the incident. Holograph has not disclosed whether they have identified the hacker responsible for the exploit.
Holograph, part of the Omnichain ecosystem, facilitates the transfer of tokens between different blockchains while maintaining the same contract address, simplifying cross-chain data indexing for asset issuers. The platform has received funding from prominent investors like Animoca Brands and Mechanism Capital.
According to a recent report by Crystal Intelligence, approximately $19 billion in cryptocurrencies have been stolen since the first industry hack in June 2011.