The Terra blockchain has temporarily suspended all operations on its network at block height 11430400 following a security breach. Terra informed its users about the development in an  X account post, adding that they would work with the developers and validators to resolve the issue.

However, some hours after the announcement, the platform resumed operations on the block without revealing additional information about the hack or the total assets lost.

Terra Suffers a $4M Attack.

Reports from Cyvers Alerts, a web3 security platform, revealed that the threat actor exploited a pre-existing vulnerability in IBC hooks. As a result of the manipulation, the hacker consequently made away with 60 million Astroport (ASTRO) tokens, 3.5 million USDC stablecoins, 500,000 USDT stablecoins, and 2.7 Bitcoins.

ASTRO Falls by 60%

The loss from the exploit and the news of Terra’s suspension of operations led to a drastic drop in the value of ASTRO, the native token of the DeFi platform Astroport, built on the Terra blockchain.

ASTRO dropped by 60%, falling from $0.045 to $0.01313. However, according to CoinMarketCap data, the coin has slightly recovered and is currently at $0.03679.

At the time of the attack, the stolen 60 million Astroport (ASTRO) tokens were worth $2.7 million. However, as the market has recovered a bit, they are worth about $2.2 million.

Terra Suffers Strings of Challenges

The exploit and the temporary suspension of activities on the Terra blockchain are not the first of its challenges. 

In 2023, the United States Securities and Exchange Commission (SEC) charged Terraform Labs, the company behind the development and maintenance of Terra blockchain, and its co-founder, Do Kwon, for securities fraud.

The SEC charged Terraform Labs and Kwon after they were found guilty of masterminding a multi-billion dollar crypto asset securities fraud, causing investors to lose billions of their funds.

Later, on June 12, 2024, the company settled with the SEC to pay a whopping $4.5 billion fine, while Do Kwon will pay $200 million to the Terraform bankruptcy estate.

The $4.5 billion settlement covered about $3.5 billion in disgorgement fines, $420 million in civil penalties, and more than $460 million in prejudgment interest. 

Recently, Terraform Labs revealed its plans to reopen the Shuttle Bridge, allowing users to redeem their sealed assets on the Terra Classic blockchain. The platform gave the users a 30-day grace period to redeem their assets, as Terra will delegate and burn 150 million LUNA tokens following court orders.