Cronos Lending Protocol Tectonic Reports Attack and Network Rollback

Cronos lending protocol Tectonic released a report on an attack that occurred on August 30. According to Foresight News, the attacker manipulated the price of the TONIC governance token and used the inflated valuation as collateral to borrow assets with a nominal value of $120.4 million from multiple markets in a single transaction. Cronos later paused the network and rolled back its state. Before the network was paused, the attacker had bridged out about $9.19 million, and the funds have not yet been recovered. The protocol said the root cause was that TONIC could be borrowed and then deposited back as collateral in the same transaction, with spot pricing, a 20% collateral ratio, and no cap tied to market depth or checks for sharp price increases. The team plans to gradually phase out low-liquidity tokens that are difficult to price as eligible collateral and set borrowing limits for each market. Further details will be announced after the implementation plan is finalized. The team is also working with forensic firms, law enforcement, stablecoin issuers, exchanges, and cross-chain bridges to recover the funds.