CrossCurve DeFi Protocol Hit: Smart Contract Exploit Drains $3M Across Multiple Chains

Another day, another DeFi breach. The CrossCurve protocol joins the not-so-exclusive club of protocols with a multimillion-dollar hole in its smart contract logic.

The Exploit: How It Went Down

The attack wasn't a sophisticated zero-day—it was a logic flaw. A function meant to manage cross-chain liquidity pools contained a validation gap. That gap let an attacker repeatedly mint synthetic assets against the same collateral, draining value from the pools. The code executed exactly as written, just not as intended. Classic.

The Multi-Chain Takedown

This wasn't isolated to one ecosystem. The exploit leveraged CrossCurve's interconnected architecture, pulling the $3 million from Ethereum, Arbitrum, and Polygon. It highlights the double-edged sword of composability: more chains, more attack surfaces. The funds vanished across bridges before most monitoring tools even blinked.

The Aftermath & The Industry Jab

The team has paused contracts, but the funds are likely already laundered through a privacy mixer—the standard 'exit strategy.' This brings CrossCurve's total losses from exploits to a neat $3 million. Investors are left hoping their 'decentralized' insurance protocol actually pays out this time. It's the financial innovation cycle in a nutshell: invent a complex system, miss a flaw, lose a fortune, and call it a 'learning experience' for the ecosystem. Meanwhile, some VC's portfolio just got a little lighter.

This won't break DeFi. The space has weathered far heavier storms. But each $3 million lesson is a stark reminder: in the race for yield, the smartest contract is the one that hasn't been exploited yet.

Smart Contract Flaw: Attackers Used Spoof Messages

Per CrossCurve post, some user addresses received token funds due to the smart contract vulnerability that were “wrongfully taken” from other users.

“We do not believe this was intentional on your part, and there is no indication of malicious intent. We hope for your cooperation in returning the funds,” the platform wrote, identifying a total of 10 addresses.

According to blockchain security account Defimon Alerts, a vulnerable CrossCurve’s smart contracts ReceiverAxelar, allowed anyone to spoof cross-chain message, bypassing the gateway validation. This has triggered unauthorized token unlocks on PortalV2 contract.

CrossCurve @crosscurvefi (ex https://t.co/4HJ33uOZUS) has been exploited for around 3 million on several networks.

Anyone could call expressExecute on ReceiverAxelar contract with a spoofed cross-chain message, bypassing gateway validation and triggering unlock on PortalV2.… pic.twitter.com/EfYe3Tfo9v

Besides, Curve Finance wrote that users who have allocated votes to the platform-related pools “may wish to review their positions and consider removing those votes.”

The protocol is backed by Curve Finance founder Michael Egorov and raised $7 million from VCs in 2023.

CrossCurve Offers 10% White Hat Bounty, Sets 72-Hour Limit

Per the SAFE Harbor Responsible Disclosure Policy, which details the steps to implement responsible reporting of security vulnerabilities, if a white-hat hacker assists in fund recovery, a 10% bounty will be provided.

“This makes you eligible to keep up to 10% if the remainder is returned,” the project team noted.

Besides, CrossCurve has set a 72-hour limit for hackers to return the funds. If no effective communication is established, the project team will take immediate escalation.

This includes formal criminal and civil proceedings, collaborating with exchanges such as Coinbase and Binance, stablecoin issuers, law enforcements and on-chain analytics firms, including Chainalysis, TRM Labs and Elliptic.

CrossCurve hack is similar to Nomad’s $190 million bridge exploit in 2022, which saw an estimated 8000 solana wallets compromised.

“In terms of prevention, an industry set of standard smart contract templates that are known to be secure, smart contract auditing and secure software development lifecycles WOULD be steps in the right direction,” Andrew Morfill, Chief Information Security Officer at Komainu, told Cryptonews. “As the market matures, securely developed and updated protocols with real utility will provide the credibility and security assurance investors are looking for.”