BounceBit to sunset blockchain, migrate to BNB Chain after $3 million exploit

BounceBit will permanently shutter its standalone Layer 1 blockchain and migrate to BNB Chain after an attacker exploited an authorization flaw to steal roughly $3 million worth of its native BB tokens.

The incident occurred between Wednesday and Thursday, according to a Friday update from the bitcoin restaking and crypto yield platform. The attacker transferred approximately 286.5 million BB from nine wallets before block production was eventually halted around 40 minutes later.

BounceBit said the vulnerability was related to a feature of the Evmos stack that its chain was built on. The flaw allowed a smart contract caller to specify a different account as the source of funds without any verification that the account authorized the transaction.

"No private key was compromised, no signature was forged, and no wallet, hardware device, or exchange account was breached," BounceBit said. Its CeDeFi Strategy, Promo Vaults, Prime, and real-world asset products were also unaffected.

Instead of patching and upgrading the network, BounceBit said it is going to permanently retire the chain and reissue BB as a BEP-20 token on BNB Chain, using a pre-attack snapshot to cancel all the unauthorized transfers. BounceBit also said it was working with exchanges to fix customer balances so they don't take any losses from the exploit.

It noted rebuilding the Evmos-based Layer 1 would be extremely difficult because Evmos itself was discontinued in May. And because most of its products and users are already available on BNB Chain, it would make the most sense to move there.

"Maintaining a standalone Layer 1 is no longer the most effective way to serve our users," BounceBit said.

BounceBit launched in early 2024 as a bitcoin restaking protocol and raised $6 million in seed funding co-led by Blockchain Capital and Breyer Capital. The platform later expanded into CeDeFi yield strategies and tokenized real-world assets, announcing last year that it planned to offer tokenized stocks from the U.S., Europe, Hong Kong and Japan.