- The TRU token collapsed from $0.1659 to almost zero, wiping out its market value.
- Liquidity on decentralized exchanges dried up after the exploit.
- The attacker wallet had been linked to a Sparkle protocol attack twelve days earlier.
A serious security breach of the Truebit Protocol has led to one of the sharpest collapses we’ve seen in the decentralized finance world this year.
The blockchain project, which focuses on authenticated computing, lost about $26.5 million after an attacker exploited a weakness in its smart contract system.
The incident crashed the protocol’s native TRU token to near zero, severely squeezing liquidity on decentralized exchanges.
Movements up the chain after the exploit show how quickly money was siphoned off, highlighting the ongoing risks surrounding the design and monitoring of smart contracts in the DeFi sector.
How the exploit unfolded
The breach was the first marked by blockchain security company PeckSchildthat a series of suspicious transactions on the Ethereum network.
Analysis showed that the attacker extracted almost 8,500 ETH from the Truebit Protocol.
At the time of the exploit, the stolen cryptocurrency was valued at approximately $26.5 million.
Data from the chain indicates that the funds were quickly split and transferred to two separate wallet addresses, identified as 0x2735…cE850a and 0xD12f…031a60.
Dividing funds in this way is a common technique to make tracking difficult and reduce the chances of recovery.
PeckShield’s preliminary findings suggest that the exploit targeted a flaw in the protocol’s contract structure, although a detailed technical overview has not yet been published.
Token collapse and liquidity shock
The impact on the market was immediate. Truebit’s native TRU token suffered a near-total collapse, falling from a daily high of $0.1659 to a low of $0.000000018.
This move effectively erased the token’s market capitalization within hours.
Liquidity on the decentralized exchanges also dried up quickly.
With pools depleted and confidence shaken, many token holders were unable to exit their positions.
The episode underscored how closely token valuations are tied to protocol security, especially for smaller DeFi projects where trust can quickly evaporate once an exploit is confirmed.
Protocol response and containment steps
After the breach, Truebit Protocol has released an official update acknowledging the incident.
The team confirmed that a specific smart contract had been compromised and warned users not to interact with it until further notice.
The protocol states that it is cooperating with law enforcement authorities and taking steps to limit further damage.
Users were also advised to rely only on official communication channels for updates as the investigation continues.
No timeline has yet been shared for recovery or potential recovery efforts.
Link to previous DeFi attack
PeckShield further reported that the wallet involved in the Truebit exploit was related to a separate attack on the SpArkel protocol about 12 days earlier.
In that case, the attacker acquired tokens and later sent money through them Nastyrnado Casha privacy service often used to hide transaction traces.
The repeated use of similar techniques indicates that an experienced operator is actively looking for vulnerabilities.
The connection has raised broader concerns in the DeFi ecosystem, where a series of linked attacks could increase risk perception beyond affected projects.
