IoTeX supplied a ten% white-hat bounty to the hacker or hackers who exploited a non-public key on its cross-chain bridge ioTube, siphoning thousands and thousands of {dollars}, in change for the voluntary return of funds inside 48 hours.
With this transfer, IoTeX is providing the $440,000 if the malicious actor or actors return roughly $4.4 million they stole, in line with an IoTeX X put up, to which IoTeX co-founder and CEO Raullen Chai pointed “as a supply of reality” on Monday.
Chai informed CoinDesk that the staff despatched an onchain message providing to not pursue authorized motion or share figuring out data with regulation enforcement if the remaining funds are returned.
“That is relating to the ioTube bridge exploit on Feb. 21, 2026,” Chai mentioned within the message. “All fund actions throughout Ethereum, IoTeX, and bitcoin have been absolutely traced.”
The message states that change deposits have been flagged and frozen and gives a ten% bounty for the return of remaining funds.
Chai additionally mentioned IoTeX is rolling out a brand new chain model, Mainnet v2.3.4, requiring node operators to improve. The replace features a default blacklist of malicious externally owned account (EOA) addresses.
“This blacklist comprises an inventory of malicious or problematic EOA addresses that shall be filtered by the node,” Chai mentioned.
The supply comes after a Feb. 21 exploit through which a compromised validator proprietor personal key enabled unauthorized management over ioTube’s bridge contracts.
IoTeX mentioned the incident is “below management,” saying that its Layer 1 blockchain was not affected and that the breach was remoted to the Ethereum-side infrastructure of the bridge.
The IOTX token fell roughly 22% following the exploit, dropping from $0.0054 to beneath $0.0042 earlier than partially rebounding.
Cross-chain bridges have been one among crypto’s important failure factors, with a number of high-profile exploits lately. In line with trade studies, greater than $3.2 billion has been misplaced because of cross-chain bridge hacks, making them a main goal for superior menace actors.
Accountability and key management
IoTeX framed the exploit as an operational concern particular to the bridge slightly than a failure of its Layer 1 community.
“IoTube is IoTeX’s personal cross-chain bridge constructed and maintained by their staff,” Nick Motz, CEO of ORQO Group and CIO of Soil, informed CoinDesk. “The breach got here all the way down to a compromised validator proprietor personal key on the Ethereum aspect, which is basically an operational safety failure, not a wise contract vulnerability found by an outdoor actor.”
Motz agreed that IoTeX’s Layer 1 was not compromised however mentioned person funds had been entrusted particularly to the bridge.
“If you construct and function the bridge infrastructure and the important thing administration is what fails, it’s tough to separate your self from that consequence,” he mentioned.
Nanak Nihal Khalsa, co-founder of human.tech, mentioned accountability in crypto typically comes all the way down to key custody.
“Sure, whoever holds the personal key’s chargeable for securing it,” Khalsa mentioned. “Is {that a} cheap accountability? It’s arduous to say. However that’s how the trade works proper now.”
He added that legal responsibility norms stay unsettled in comparison with conventional finance and known as for stronger pockets and multisig setups to cut back comparable dangers.
The estimates diverge
On-chain evaluation by safety agency PeckShield estimated extra than $8 million value of property had been affected, saying the attacker swapped funds into ether (ETH) and commenced bridging them to bitcoin through THORChain.
“The hacker has swapped the stolen funds to $ETH and has began bridging them to #BTC through #Thorchain,” the agency wrote.
One other onchain investigator, Specter, mentioned on X that “the personal key of @iotex_io could have been compromised,” leading to an estimated $4.3 million loss.
“As soon as property are routed by way of THORChain […] restoration turns into extraordinarily tough,” Motz mentioned.
IoTeX mentioned it has recognized 4 bitcoin addresses holding 66.78 BTC value roughly $4.3 million at present costs and that the addresses are being monitored in cooperation with exchanges.
A CoinDesk evaluation of these addresses on Feb. 23 confirmed they held roughly 66.6 BTC.
IoTeX didn’t instantly reply to CoinDesk’s request for remark.
“Containment will not be the identical as restoration,” he added. “The property with precise market worth had been swapped and bridged. These are, in my evaluation, unlikely to be recovered.”
Khalsa equally cautioned that restoration prospects are unsure. “It’s arduous to foretell how a lot, if any, will be recovered,” he mentioned.
IoTeX revised its determine upward to roughly $4.3 million, reflecting the direct asset drain however excluding minted tokens. Motz mentioned broader estimates could higher seize the severity of the breach.
“Personal key compromise slightly than sensible contract bugs is rising as a dominant assault vector,” Motz mentioned, noting that such incidents goal operational safety slightly than audited code.
Earlier than providing the ten% bounty, IoTeX mentioned a compensation plan could be in place throughout the subsequent 48 hours.