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LayerZero Vulnerability Allows Hacker to Create 5 Billion $GAIN, Causing 84% Price Drop

LayerZero Vulnerability Allows Hacker to Create 5 Billion $GAIN, Causing 84% Price Drop

Bitget-RWA2025/09/25 09:08
By:Coin World

- Griffin AI's $GAIN token crashed 84% after attackers exploited a LayerZero bridge vulnerability to mint 5 billion counterfeit tokens. - Attackers created a fake LayerZero Peer on Ethereum, bridged tokens to BSC, and laundered $3 million via Tornado Cash. - The exploit exposed critical flaws in cross-chain security, triggering panic selling and eroding $4.6 million in market cap. - Experts warn of systemic risks in decentralized protocols, urging stricter audits to prevent similar losses in DeFi ecosystem

LayerZero Vulnerability Allows Hacker to Create 5 Billion $GAIN, Causing 84% Price Drop image 0

Following its debut on Binance, Griffin AI’s native token $GAIN suffered a devastating security incident, as hackers exploited a flaw in the

cross-chain bridge to create 5 billion fake tokens. This breach led to an 84% drop in price within a single day, slashing the token’s value from $0.16 to $0.17 and wiping out 81.66% of its market cap, leaving it at $4.6 million. Blockchain security company CertiK verified that the exploit involved setting up a fraudulent LayerZero Peer on , which allowed the attacker to transfer the counterfeit tokens to Binance Smart Chain (BSC) and cash out.

Lookonchain, an on-chain analytics provider, traced the attacker’s transactions, showing that 2,956

(worth $3 million) was obtained by selling the 5 billion forged tokens. The attacker then swapped these proceeds for Ethereum and funneled them through Tornado Cash, a service designed to obscure crypto transactions. The complexity of the exploit highlights the dangers associated with cross-chain bridges and token creation flaws, with CertiK noting that the attacker manipulated liquidity and incited panic selling through the breach.

This event has sparked serious concerns about the reliability of decentralized protocols. The sudden addition of 5 billion tokens into the market diluted the token’s worth and caused trading volume to spike by 400%, further destabilizing prices. CertiK pointed out that the root of the attack was a critical weakness in LayerZero’s peer initialization, a problem that could threaten other cross-chain tokens as well.

The downfall of the Griffin AI token has been compared to other recent crypto hacks, underscoring the vulnerability of projects lacking thorough security reviews. Lookonchain’s review of the attacker’s wallet addresses—0x107E83EBE677DDec253C440127F23310720177c2 and 0xB31BDDb3d1c2b45E5c5fE149Aa4c8304e9D1916C—indicates that recovering the stolen funds is unlikely due to the use of privacy mixers.

Industry analysts caution that such breaches undermine investor trust and stress the importance of stronger protocol oversight. The Griffin AI hack stands as a warning for both developers and users, illustrating how a single security gap can result in widespread losses in just hours. As the community responds to the aftermath, this incident may drive greater demand for robust security protocols and independent audits within the DeFi sector.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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