Holograph, a prominent platform for omnichain tokenization, suffered a significant smart contract breach resulting in the loss of 1 billion HLG tokens, valued at about $7 million.

In the aftermath, the project's native HLG token plummeted approximately 80% over the past 24 hours, dropping to as low as $0.0029 before recovering slightly to $0.0068 at the time of reporting. These tokens were distributed to the community via airdrop in May.

Holograph enables seamless token transfers across blockchains while maintaining the original contract address, which facilitates effective indexing of cross-chain data for asset issuers. The company had garnered investments from notable backers such as Animoca Brands and Mechanism Capital.

Regarding the hack, Holograph confirmed that its Holograph Operator Contract was compromised by a malicious actor who minted 1 billion HLG tokens. Although the initial breach has been patched, the platform's team is actively collaborating with exchanges to freeze the compromised accounts and has initiated an investigation while involving law enforcement.

On-chain data reveals that the stolen tokens were valued at approximately $7 million at the time of the theft. Cyvers, a blockchain security platform, reported that some of the stolen tokens were exchanged for the USDT stablecoin, enabling the attacker to acquire 300 ETH. Subsequently, the hacker dispersed these funds across multiple addresses, including those associated with privacy protocols like Tornado Cash and Railgun.

Despite these transactions, the exploiter's address still retains about 47.59 ETH, valued at approximately $167,000 as of now.

According to Matt Casto, a DeFi researcher at CMT Digital, the attacker likely operated as a rogue developer who funded the address 26 days ago, which subsequently received the minted token supply.

This security breach occurred amid Holograph's recent upgrades within its ecosystem. The platform had planned to transition to LayerZero V2 to bolster cross-chain security and expand support to new chains such as Sei, Blast, Solana, Ton, zkSync, and ZetaChain.