Harmony blockchain eyes potential rollback following alleged exploit that expanded ONE token circulation
The layer-1 blockchain platform is collaborating with cryptocurrency exchanges to halt transactions and freeze assets while developing a fix, following allegations that 2.8 billion unapproved ONE tokens reached trading venues.
The Harmony blockchain platform is weighing the possibility of executing a network rollback following allegations that a malicious actor leveraged a vulnerability to generate close to 4 billion ONE tokens, representing roughly 26% of the cryptocurrency's total circulating supply.
In a statement released on Tuesday, Harmony announced it had initiated coordination efforts with cryptocurrency exchanges to halt transactions and secure the affected funds. The layer-1 blockchain network indicated it was in the process of developing a remediation patch while simultaneously assessing various rollback scenarios. The organization refrained from verifying the root cause of the incident, the precise quantity of tokens generated, or the volume that reached exchange platforms.
Cointelegraph reached out to Harmony seeking additional commentary but did not receive a reply prior to the time of publication.
The announcement from Harmony came as a direct response to allegations posted by an X platform account known as "Juiceberg," which asserted that the illegitimate ONE tokens were generated via empty blocks and that roughly 2.8 billion tokens were rapidly transferred to exchange platforms while ONE's market value declined.
According to Juiceberg's analysis, the perpetrator retained approximately 115 million ONE tokens on the blockchain, representing 2.9% of the total allegedly created amount, while the balance was either liquidated or stored in exchange deposit addresses. Cointelegraph was unable to independently authenticate these allegations.
According to CoinGecko data at the time of writing, ONE experienced a 33.9% decline in value during the preceding 24 hours.
This latest security breach occurs in the wake of Harmony's June 2022 Horizon Bridge security compromise, which resulted in the misappropriation of approximately $100 million worth of digital assets. Federal investigators from the FBI subsequently linked the attack to the Lazarus Group, a cybercrime organization associated with North Korea.