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5h ago

Unleash Protocol Halts After $3.9 Million Governance Exploit as Stolen Funds Flow to Tornado Cash

Investigators trace the incident to an unauthorized multisig upgrade confined to Unleash contracts rather than Story Protocol.

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Overview

  • PeckShieldAlert first flagged suspicious withdrawals, which Unleash later confirmed as a breach.
  • Attackers gained control of the multisig governance to push an unauthorized contract upgrade that enabled direct asset withdrawals.
  • About $3.9 million was drained across WIP, USDC, WETH, stIP, and vIP, according to on-chain analysis and reporting.
  • The stolen assets were bridged to Ethereum, with roughly 1,337.1 ETH deposited into Tornado Cash in segmented transfers.
  • Unleash paused operations, preserved on-chain evidence, engaged independent security and forensic teams, and urged users to avoid its contracts pending further updates.