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Allbridge, the company behind the Allbridge Core cross-chain stablecoin bridge, temporarily paused the protocol following a security incident. Preliminary estimates suggest that an attacker drained around $1.65 million.
The exploit affected the Solana deployment of Allbridge Core. The stolen funds were transferred from Solana to Ethereum, after which the attacker moved them into services designed to obscure transaction history.
“Allbridge Core has experienced a security incident. As a precaution, we have paused the protocol while we investigate. Users with liquidity in the affected pools are advised to withdraw their funds,” the project team said in a post on X.
The incident was at least the sixth attack on a cross-chain bridge since May. Such protocols are frequent targets for hackers because they often hold large pools of assets backing tokens issued on other blockchains.
Attack details
According to Onchain Lens, the attacker took out a $1.12 million USDC flash loan through the Kamino protocol. They then carried out a series of rapid swaps between USDC and USDT, distorting the exchange rate in Allbridge Core’s stablecoin pool.
The attacker subsequently withdrew liquidity at the manipulated rate, repaid the $1.12 million flash loan and kept the difference.
Allbridge said the pool imbalance briefly created a profitable arbitrage opportunity. The team asked users who may have taken advantage of it to return the funds.
“These funds will be used directly to compensate affected liquidity providers,” the company said.
This was not the first time Allbridge Core had been targeted through flash-loan manipulation.
In April 2023, an attacker drained around $573,000 from an Allbridge pool on BNB Chain. The attacker acted as both a liquidity provider and a trader, exploiting a smart contract vulnerability to manipulate swap prices.
The exploit resulted in the theft of approximately $289,900 in Binance USD and $290,900 in USDT.
Why cross-chain bridges are needed
Cryptocurrency can also be moved from one network to another through a centralized exchange. To do this, a user must deposit the assets on a trading platform, exchange them if necessary and then withdraw the coins to the required blockchain. However, this process usually requires registration, identity verification and handing control of the funds to an intermediary.
Cross-chain bridges allow users to complete the transfer directly through a crypto wallet without depositing assets on an exchange. They are particularly useful for people using decentralized applications who need to move stablecoins and other tokens quickly between different blockchains.
For example, a user can move USDC from Solana to Ethereum to use the funds in a lending protocol or on a decentralized exchange. There is no need to sell the asset, convert it into fiat currency or wait for a centralized platform to process the withdrawal.
However, this convenience comes with additional risks. To issue an asset on a new network, a bridge usually locks the original tokens or stores funds in dedicated liquidity pools. As a result, large amounts of money are concentrated in the smart contracts of such services, making them attractive targets for attackers.
As previously reported, the number of hacks targeting cryptocurrency websites reached a record high in the second quarter of 2026.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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