Holograph, a prominent omnichain tokenization platform, suffered a major smart contract exploit, leading to the loss of 1 billion HLG tokens worth about $7 million.

In response, the value of the HLG token plummeted by approximately 80% within the past 24 hours, hitting a low of $0.0029 before partially rebounding to $0.0068 as of the latest update. These tokens were initially distributed via an airdrop to the community in May.

Holograph enables seamless token transfers across different blockchains while maintaining the original contract address, enhancing cross-chain data indexing. The company has received investments from major backers such as Animoca Brands and Mechanism Capital.

The Hack

The platform announced on X that its Holograph Operator Contract was breached by a malicious actor who minted 1 billion HLG tokens.

Although the exploit has been patched, Holograph is working with exchanges to freeze the compromised accounts. The team stated:

"We have launched an investigation and are in the process of contacting law enforcement."

On-chain data valued the stolen tokens at around $7 million at the time of the hack.

According to blockchain security firm Cyvers, some of the stolen tokens were exchanged for USDT, which the attacker then used to buy 300 ETH. The hacker dispersed the funds across multiple addresses, including those associated with privacy protocols like Tornado Cash and Railgun.

Despite these transactions, on-chain data shows the exploiter's address still holds about 47.59 ETH, worth approximately $167,000 at the current rate.

Matt Casto, a DeFi researcher at CMT Digital, suggested the attacker was likely "a rogue developer who funded the address 26 days ago," and that "this address received the minted supply."

This breach occurred shortly after the project announced upgrades to its ecosystem. Holograph planned to upgrade to LayerZero V2 to bolster cross-chain security and support new chains like Sei, Blast, Solana, Ton, zkSync, and ZetaChain.