Decentralized finance insurer Cozy Finance has fallen victim to an exploit on the Optimism network, resulting in the theft of approximately $170,000. Blockchain security firm Blockaid flagged the incident early Monday morning.
According to OP Mainnet explorer data, the exploit transaction took place at 05:43 UTC on Monday. The attacker moved about 163,326 USDC.e out of the protocol across 63 token transfers. During the transaction, roughly 1.6 million Cozy PToken were burned. The attacker subsequently approved a token and bridged the funds out of the network at 05:56 UTC, completing the exit before Blockaid published its public alert.
Explorer records indicate that the attack contract was deployed on September 2, five days prior to the drain, with the wallet drawing its initial funds from a Relay solver. Blockaid identified Cozy Set as the abused token contract, noting that the unverified contract still held about $4,168 in USDC.e.
Second Optimism Breach for the Protocol
Cozy Finance operates protection markets that allow users to purchase cover against decentralized finance failures. This incident marks the second time the protocol has suffered a breach on Optimism, following an earlier attack in August 2025 that cost the platform approximately $427,000 due to a withdrawal code flaw.
Following the latest drain, DefiLlama data indicates that the attacker swept nearly the entire deployment on Optimism. Cozy Finance currently ranks fifth among insurance protocols on DefiLlama, holding approximately $1.3 million in total value.
The incident adds to a recent series of security events across the decentralized finance sector, which included a $1.73 million loss by Notional Finance to an integer overflow bug and the wind-down of Full Sail following a $91,000 exploit. Blockaid has stated that it will provide further details as it continues to trace the stolen funds.
