NAIROBI (CoinChapter.com)— On June 13, the blockchain tokenization platform Holograph suffered a security breach. A hacker exploited the Holograph protocol to mint 1 billion Holograph (HLG) tokens worth $14.4 million.
The value of HLG tokens plummeted by nearly 80% within hours, dropping from $0.014 to a low of $0.0029. HLG price attempted an unsustained recovery to $0.0049 before stabilizing at $0.002887.
Former Contractor Responsible for Exploit
Holograph initiated an internal investigation with blockchain security firm Halborn, releasing a post-mortem report on July 2. The report identified the hacker as a former contractor with admin access to Holograph Protocol v1 contracts.
Using a proxy wallet, the hacker minted HLG tokens and sold them on the open market, causing the price to crash. This planned attack leveraged the contractor’s privileged access to exploit the system.
The former contractor used his admin privileges to add malicious jobs to the HolographOperator V2 contract months before the breach. On the day of the incident, these jobs enabled the minting of 1 billion HLG tokens.
These tokens were swiftly bridged across various networks, including Ethereum, Binance Smart Chain, and Polygon. The rapid transfer and sale of the tokens on multiple exchanges led to the token’s drastic price decline.
Holograph’s Response and Future Actions
Holograph intends to involve law enforcement in the investigation. The protocol has implemented operational risk controls to prevent future insider attacks. The team assured the community that only the circulating supply would be burned to return it to the original schedule.
Despite the breach, Holograph has resumed operations. The team has re-enabled bridging on the v2 protocol and informed exchanges like Bybit, Gate, KuCoin, Bitget, and Backpack that it is safe to reopen HLG deposits and withdrawals.
In an upcoming update, Holograph will provide further updates on asset recovery and law enforcement proceedings.
In a related incident, on June 3, the Bittensor protocol experienced a network outage due to a series of wallet drains.
At least $8 million worth of digital assets were stolen, forcing the network to halt activity. Bittensor co-founder Ala Shaabana confirmed the containment of the attack and the network’s shift to safe mode.
