Unleash Protocol Smart Contract Exploitation Results in a $3.9 Million Loss

FOMOSapien · 2026-01-13T09:56:34+00:00

O Unleash Protocol suffered an attack resulting in the theft of US$ 3.9 million due to vulnerabilities in its smart contracts. The incident compromised its operation and trust, leading to an immediate suspension of activities while the team investigates and seeks to recover the funds.

FOMOSapien

2026-01-13 09:56:34

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Unleash Protocol suffered a significant attack resulting in the theft of approximately US$ 3.9 million in funds. The vulnerability was identified in the platform’s smart contract security mechanisms, allowing an attacker to gain unauthorized access to the system.

How the Attack Occurred

The exploitation originated from the protocol’s multisig governance architecture, which had authorization loopholes. Through this flaw, the attacker was able to perform unauthorized updates to the smart contracts and withdraw funds without proper restrictions. The stolen assets included over 1,337 ETH, which were later transferred through Tornado Cash to obscure the transaction trail.

Impact on the Ecosystem

While the main blockchain of the Story Protocol remains intact and was not directly affected, the incident undermines trust and could significantly impact the project’s development timeline. The severity of the attack led Unleash Protocol to suspend all its operations immediately.

Next Steps

The protocol team is actively investigating with the goal of recovering the stolen funds. This event underscores the importance of rigorous audits of smart contracts and continuous improvements in multisig governance security mechanisms.

ETH6,05%

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