Cronos, the EVM-compatible layer 1 blockchain built around the Crypto.com ecosystem, was halted on Sunday after an attacker exploited Tectonic, a decentralized lending application running on the network. The exploit is believed to have moved about $75 million out of Tectonic's lending pools. Cronos validators made the unusual decision to stop block production while the situation was assessed, leaving transaction processing paused and many users unable to withdraw or interact with their funds.

The attack centered on TONIC, Tectonic's native token. According to early assessments, the attacker pushed the price of TONIC up by roughly 100 times, used those newly valuable tokens as collateral, and then borrowed other assets from Tectonic's pool. Those borrowed assets were not more TONIC; they were real and relatively liquid assets such as stablecoins and other cryptocurrencies that had been supplied by depositors. When the artificial price of TONIC inevitably collapsed, the loan became massively undercollateralized, creating a severe shortfall in the lending protocol.

Key facts at a glance

• Cronos halted its blockchain on Sunday after an attacker manipulated the price of Tectonic's TONIC token, with the exploit estimated at about $75 million.
• The attacker allegedly pushed TONIC's price up

  
  Source: Coindesk News