Hacker Prints 1.2B AUSD On Acala Network, AUSD Depegs After The Exploit 

by
Stablecoins
Hacker Prints 1.2B AUSD On Acala Network, AUSD Depegs After The Exploit 

This year has been rough for stablecoins as several stablecoins have depegged from the USD. On August 14th, the AUSD (Polkadot-based stablecoin) of Acala Network dropped below $1. Reports revealed that a hacker attacked the platform and minted over 1.2 billion AUSD.

Polkadot’s AUSD Falls Below $1 Parity

Apart from USDC, DAI, and USDT, other stablecoins have not been so stable this year. The most popular de-pegging of a stablecoin is that of the Terra USD, now called USTC. 

The fall of the Terra stablecoin caused the whole ecosystem to crash and over $40 billion left the cryptocurrency economy. After that, other stablecoins followed, such as the USDN, Tron’s USDD, and MIM.

Unfortunately, Terra’s latest USTC has not regained its anchor to the Dollar since the de-pegging. Other stablecoins like USDD, MIM, and USDN have been trading at around $0.99 per coin.

Meanwhile, another stablecoin has recently lost its peg. The incident occurred on August 14th after an anonymous hacker minted over 1.2 billion AUSD on the platform.

According to Acala Network’s Twitter post, the team noticed a configuration problem with the Honzon protocol. The DeFi platform said this issue affected the AUSD stablecoin.

Binance CEO Comments On Attack

Additionally, the platform said it had a vote to stop operating on the network while it investigated the issue. The network said it would provide more feedback when the system is functioning. 

Meanwhile, Changpeng Zhao, Binance CEO, also reported the situation on Twitter. He said the platform is compromised and has a bug in its iBTC/AUSD pool. 

Zhao noted that the wallet of the attacker has over one billion AUSD. Meanwhile, the CEO pointed out that the stablecoin is not on Binance. 

Other reports said the stablecoin lost its hold on the Dollar after the hacker minted 1.2 billion AUSD. Other security firms said it was a misconfiguration issue that led to an excessive minting of the stablecoin. 

Acala Network Solves Misconfiguration Issue

However, Acala Network recently reported that it had rectified the misconfiguration issue. Also, its team has identified the crypto wallets which received the minted tokens. 

Hence, the team is currently carrying out an onchain investigation. The team had to pause all operations on its platform to ensure the attacker did not move out more tokens.

Meanwhile, investors who hold the stablecoin have voiced displeasure about the recent development. The current events have raised concerns over the vulnerability of DeFi platforms. Currently, the AUSD is still trading below $1 per CoinMarketCap as of the time of writing.

Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.