IoTeX provided a ten% white-hat bounty to the hacker or hackers who exploited a personal key on its cross-chain bridge ioTube, siphoning tens of millions 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 keeping with an IoTeX X publish, to which IoTeX co-founder and CEO Raullen Chai pointed “as a supply of fact” on Monday.
Chai advised CoinDesk that the crew despatched an onchain message providing to not pursue authorized motion or share figuring out data with legislation 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 affords 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 accommodates a listing of malicious or problematic EOA addresses that might be filtered by the node,” Chai mentioned.
The provide comes after a Feb. 21 exploit during which a compromised validator proprietor non-public key enabled unauthorized management over ioTube’s bridge contracts.
IoTeX mentioned the incident is “beneath 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 under $0.0042 earlier than partially rebounding.
Cross-chain bridges have been one in every of crypto’s principal failure factors, with a number of high-profile exploits lately. In line with trade experiences, greater than $3.2 billion has been misplaced on account 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 fairly than a failure of its Layer 1 community.
“IoTube is IoTeX’s personal cross-chain bridge constructed and maintained by their crew,” Nick Motz, CEO of ORQO Group and CIO of Soil, advised CoinDesk. “The breach got here right down to a compromised validator proprietor non-public key on the Ethereum aspect, which is essentially 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 have been entrusted particularly to the bridge.
“While you construct and function the bridge infrastructure and the important thing administration is what fails, it’s troublesome to separate your self from that final result,” he mentioned.
Nanak Nihal Khalsa, co-founder of human.tech, mentioned duty in crypto typically comes right down to key custody.
“Sure, whoever holds the non-public key’s accountable for securing it,” Khalsa mentioned. “Is {that a} affordable duty? It’s onerous 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 referred to as for stronger pockets and multisig setups to cut back related dangers.
The estimates diverge
On-chain evaluation by safety agency PeckShield estimated greater than $8 million value of property have 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 non-public key of @iotex_io could have been compromised,” leading to an estimated $4.3 million loss.
“As soon as property are routed by means of THORChain […] restoration turns into extraordinarily troublesome,” 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 isn’t the identical as restoration,” he added. “The property with precise market worth have been swapped and bridged. These are, in my evaluation, unlikely to be recovered.”
Khalsa equally cautioned that restoration prospects are unsure. “It’s onerous to foretell how a lot, if any, may 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 fairly than good contract bugs is rising as a dominant assault vector,” Motz mentioned, noting that such incidents goal operational safety fairly than audited code.
Earlier than providing the ten% bounty, IoTeX mentioned a compensation plan could be in place inside the subsequent 48 hours.