Axelar has disabled its Secret Network bridge connections after a security incident resulted in the loss of roughly $4.7 million worth of bridged assets.
Summary
- Axelar disabled Secret Network bridge routes after a $4.7 million exploit tied to a Secret-side ICS-20 contract.
- The company said the incident appears limited to Axelar-bridged assets on Secret Network, with no impact on its core protocol.
- Binance Research previously estimated DeFi exploits triggered $13 billion in TVL outflows and pushed leverage ratios to 2021 highs.
According to Axelar, the exploit affected assets transferred from the Axelar chain to Secret Network through the Cosmos Inter-Blockchain Communication framework.
Early findings from the investigation indicate the issue is linked to the Secret-side ICS-20 smart contract used in the IBC connection between the two networks rather than Axelar’s core infrastructure.
As part of its immediate response, Axelar said its emergency committee shut down the Secret and Secret-SNIP connections to prevent further losses. The interoperability protocol also stated that it had contacted relevant exchanges and law enforcement agencies while its investigation remains ongoing.
Secret Network operates as a privacy-focused blockchain that encrypts transaction data while allowing smart contract code to remain verifiable on-chain.
Through its integration with Axelar, developers have been able to support private cross-chain applications, including confidential decentralized finance activity, private NFT transactions, and anonymous governance functions.
Exploit appears limited to a single bridge connection
Details shared by Axelar indicate that the incident is confined to assets on the Secret Network that were bridged from Axelar. The company said no evidence currently suggests that other IBC connections, Secret-native assets, or additional Axelar integrations were affected.
At the same time, Axelar emphasized that its core protocol remained operational throughout the incident. The team said the suspected vulnerability was isolated to the Secret-side contract involved in processing transfers from Axelar into the Secret ecosystem.
A full post-mortem is expected once the investigation is completed. Until then, the affected bridge routes will remain disabled as engineers continue reviewing the attack path and assessing the extent of the losses.
The incident adds to a growing list of security breaches that have disrupted crypto infrastructure projects in recent weeks. Earlier this month, Humanity Protocol disclosed recovery measures after a June 8 exploit that forced the project to retire its original H token across Ethereum, BNB Chain, and Humanity Mainnet.
According to Humanity Protocol, affected users will receive replacement H tokens through an airdrop tied to a newly deployed audited ERC-20 contract on Ethereum. The project stated that the breach resulted from stolen credentials rather than vulnerabilities in its token contracts, bridge infrastructure, or Safe setup.
Recent exploits continue to pressure crypto projects
Security incidents have also had consequences beyond immediate token losses. Earlier this week, crypto payments platform Pyra announced plans to wind down operations after determining it could not recover from the financial and user impact of the Drift exploit.
Against that backdrop, Axelar’s response has focused on containing the Secret Network incident while investigators determine how the exploit occurred. The company said it will provide additional details once its review is complete and has maintained that no other parts of the Axelar network appear to be affected based on current findings.
As crypto.news reported earlier, Binance Research estimated that DeFi exploits in April alone contributed to roughly $13 billion in total value locked outflows across decentralized finance protocols, reducing available liquidity throughout the sector. The research arm also found that the on-chain leverage ratio climbed to around 38%, a level last seen in 2021, as TVL declined faster than borrowing activity.
