NEAR Protocol (NEAR), $4 Million Hacked in Core Ecosystem...Eventually Breaches $5 Mark

▲ NEAR Protocol (NEAR)/AI generated image

A hack of approximately $4 million occurred at NEAR Intents, a core cross-chain swap protocol within the NEAR Protocol (NEAR) ecosystem. A security vulnerability was exposed during the interaction between the Omni deposit/withdrawal infrastructure and smart contracts. The price of NEAR Protocol tokens, which had been enjoying success immediately after the listing of a spot Exchange Traded Fund (ETF) in the US, fell below the $5 mark during intraday trading due to the aftermath of the security incident.

According to FXStreet, a virtual asset and finance specialized media outlet, on October 1 (local time), NEAR Intents immediately suspended related services upon confirming the outflow of funds. This incident temporarily froze deposit and withdrawal functions on 11 major blockchain networks, including Polygon, Stellar (XLM), and Avalanche. On-chain tracking revealed that the attacker transferred the stolen funds to the KuCoin exchange and converted them into Bitcoin (BTC).

Upon news of the hack, market selling pressure rapidly intensified. The NEAR Protocol price, which had risen to $5.54 during intraday trading on the same day, fell to the $4.88 mark as the security setback was reflected. Technical indicators also showed major momentum indicators declining across the board, indicating that sellers held a short-term advantage.

The official response from the foundation and development team to resolve the situation was also swift. NEAR Intents announced that patch work for the related vulnerability had been completed and that the incident had been officially reported to law enforcement authorities. Furthermore, they publicly declared a policy to fully compensate all platform users for their losses. NEAR Protocol also stated via X (formerly Twitter) that "this incident is unrelated to any security flaws in NEAR Protocol itself or its native token NEAR, and the mainnet network is operating normally, generating blocks and processing transactions without interruption."

Experts analyzed that this hacking incident, coinciding with the initial success of Bitwise's NEAR spot ETF launch, is acting as a short-term test of the reliability of virtual asset infrastructure. Given that it has been confirmed not to be a flaw in the mainnet itself and a full compensation plan for damages has been proposed, the timing of future deposit/withdrawal resumption and the recovery of the $5 support level are considered key variables to prevent further declines.

[Article Key Summary]

-A hack of approximately $4 million occurred at NEAR Intents due to an Omni infrastructure flaw.

-Following the security incident, the NEAR Protocol price dropped from $5.54 to $4.88 during intraday trading on the same day.

-A full compensation policy for damages has been announced, and the mainnet network is operating normally without flaws.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*