The YZi-backed bitcoin restaking firm BounceBit has announced it is shutting down its blockchain following an exploit that resulted in the theft of over $3.1 million worth of its BB token.
According to BounceBit, attackers moved 286 million BB tokens without authorization out of nine BounceBit Chain wallets between August 19 and August 20. An authorization flaw in the vesting and lockup account module, hosted by Evmos and utilized by BounceBit Chain, reportedly caused the exploit.
BounceBit reported that the attacker sent an estimated 254 million BB tokens to one major crypto exchange, approximately 10 million BB tokens to another exchange, and left 18.5 million BB tokens in a consolidated address. The firm stated that its CeDeFi app, smart contracts, and vaults are not affected.
Network Upgrade Ruled Out
Following a technical review, BounceBit decided to sunset the blockchain rather than implement a network upgrade, noting that the chain is built on already discontinued Evmos infrastructure. The company stated that moving the fork to a successor codebase would require a substantial re-platforming, including a full rebuild, re-audit, and revalidation.
All BB tokens outside of those held by the attackers will be reissued as BEP-20 tokens on BNB Chain. A snapshot taken at the block prior to the exploit will determine the distribution amounts for users. BounceBit stated it has asked cryptocurrency exchanges to freeze specific addresses tied to the exploit without impacting innocent users.
Token Holder Guidance
BB token holders have been informed that no action is required on their part and are advised to remain cautious of potential scammers offering assistance.
BounceBit previously raised $6 million in a 2024 seed funding round co-led by Blockchain Capital and Breyer Capital, with YZi Labs investing later in April 2024.
