YZi Labs-backed BounceBit Chain to shut down after $3M exploit

Protos reported that BounceBit, the YZi Labs-backed bitcoin restaking firm, said it will shut down its blockchain after hackers exploited an authorization vulnerability and stole more than $3.1 million worth of BB tokens. BounceBit said attackers were able to move 286 million BB tokens out of nine BounceBit Chain wallets without authorization between Aug. 19 and Aug. 20. The company said the exploit appears to have come from an authorization flaw in the vesting and lockup account module hosted by Evmos and used by BounceBit Chain. According to BounceBit, the attacker sent an estimated 254 million BB tokens to one “major” crypto exchange, nearly 10 million BB tokens to another exchange, and left 18.5 million BB tokens in a consolidated address. In a post on X, BounceBit said it had identified an issue affecting BounceBit Chain and paused nodes out of caution while it deployed a fix. BB transactions are temporarily unavailable. The company said the problem is limited to the chain itself. Its CeDeFi app is not affected, and neither are smart contracts or vaults. BounceBit said a technical review led it to sunset the blockchain, and that it cannot implement a normal network upgrade because the chain is built on discontinued Evmos infrastructure. It said moving the fork onto a successor codebase would require a full rebuild, re-audit and revalidation before user assets could be carried again safely. All other BB tokens, except those tied to the attacker, will be reissued as BEP-20 tokens on BNB Chain. BounceBit said it will use a snapshot of the block before the exploit to determine how many BEP-20 tokens each user receives. The company also said it has asked crypto exchanges to freeze specific addresses, without affecting innocent users’ funds. BB holders were told they do not need to do anything and should be cautious of scammers offering help. Protos said BounceBit raised $6 million in a 2024 seed round co-led by Blockchain Capital and Breyer Capital. It also cited Binance Square moderator Tang Hua as saying YZi Labs invested later in April 2024.