K9 Finance Offers Bounty for Return of Funds After Shibarium Exploit - Here’s What Happened

Another day, another DeFi exploit—but this time with a twist.

K9 Finance just got rocked by a Shibarium network breach, and they're taking the white-hat route. Instead of lawyers and threats, they're putting bounty money on the table for whoever returns the stolen funds. Smart move or desperate plea? Probably both.

How It Went Down

The exploit hit hard and fast. Unknown attackers drained liquidity from Shibarium-powered pools, leaving K9 scrambling. No exact numbers yet—classic crypto opacity—but insiders whisper it’s significant.

Bounty Over Blame

K9’s team skipped the fury and went straight to negotiation. They’re offering a clean, no-questions-asked reward for the safe return of assets. It’s a gamble—rewarding bad behavior sometimes looks weak—but recovering funds beats empty principles.

DeFi’s Recurring Nightmare

This isn’t new. Protocols get drained, teams panic, and the cycle repeats. Sometimes funds come back; often they don’t. But in a space where ‘code is law’ until it isn’t, bounties are becoming the go-to crisis PR tool.

Just another reminder: in crypto, your assets are only as safe as the weakest smart contract—or the greediest hacker.

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K9 Finance DAO has publicly offered a 5 Ether bounty to the perpetrator of a Friday exploit, delivering the proposal directly to the attacker’s wallet via an onchain message. The offer was made only after the project first froze approximately $700,000 in stolen $KNINE tokens, a strategic MOVE that renders the assets untradeable and presents the bounty as the only way for the attacker to profit.

The move followed a broader attack on Friday where a significant amount of digital assets were drained from the Shibarium bridge. According to shiba inu lead developer Kaal Dhairya, the event was a “sophisticated (probably planned for months) attack” carried out with a flash loan that allowed the attacker to gain majority control of the bridge’s validators and authorize a malicious transfer.

A Tactical Response

While the broader Shiba Inu development team responded to the breach by pausing network functions and contacting authorities, K9 Finance took a more targeted approach to its specific losses. The project’s developers first used an emergency function to blacklist the attacker’s wallet, immobilizing the stolen KNINE.

Only after securing the assets did the team extend the bounty offer on the blockchain. Buzz, the K9 Finance DAO’s pseudonymous lead developer, confirmed the strategy in a public statement. “They will never be able to sell or move these tokens,” he wrote. “Their only way of getting value is accepting the bounty.”

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The offer was deployed via a trustless smart contract that remains active for 30 days and will see its reward decrease after one week.

Details of the Exploit and Response

The attacker initiated the exploit by using a flash loan to acquire 4.6 million BONE tokens. This temporarily gave them enough delegated power to achieve a majority among the bridge’s validators, allowing them to sign and approve a malicious transaction that transferred assets to their own wallet.

Related: LEASH v2 Migration Now Nears After Final Security Greenlight

In a statement on X, Dhairya confirmed the technical details of the attack and the team’s immediate response, which included moving funds to a secure hardware wallet. While pursuing a formal investigation, he also signaled an openness to negotiate.

Shibarium Bridge Security Update

Earlier today, a sophisticated ( probably planned for months ) attack was carried out using a flash loan to purchase 4.6M BONE. The attacker gained access to validator signing keys, achieved majority validator power, and signed a malicious…

— Kaal (@kaaldhairya) September 13, 2025

“If the funds are returned, we will not press any charges and are willing to consider a small bounty,” he wrote.

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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.