Symbiosis said two software flaws in its Bitcoin Bridge let an attacker use a 330-satoshi bitcoin deposit, worth about $0.25, to generate roughly 46.1 billion unbacked syBTC through 12 bogus deposits. According to the project’s post-mortem and blockchain data reviewed by CoinDesk, the attack unfolded across BNB Chain, Ethereum and Rootstock in about four minutes. One bug let the attacker obtain administrator privileges by exploiting how the bridge identified the sender of a bitcoin transaction. A second bug treated a negative fee as an addition, allowing the deposit amount to be inflated to essentially any number the attacker entered. Despite the huge token count, Symbiosis put preliminary losses at 9.97 BTC, or about $770,000, because unbacked bridge tokens do not create the real assets needed for redemption. The project said syBTC supply had been only 13.91 before the attack, with 11.26 syBTC in pools paired with WBTC, cbBTC, BTCB and RBTC. Symbiosis has taken the native Bitcoin Bridge offline, said it will rewrite the bitcoin-side software, commission an independent audit and compensate affected users and liquidity providers.

Cross-chain liquidity protocol Symbiosis said it has recovered 15 BTC, worth about $1.1 million, after an exploit hit its native Bitcoin bridge on Friday. The recovered Bitcoin has been moved to a team-controlled multisig wallet, while the protocol said all routes remain operational except for the native Bitcoin bridge, which is still paused. Blockchain security firm Blockaid said the attacker minted 46.1 billion unbacked tokens through the bridge and ultimately realized net proceeds of 4.3 WBTC, or about $336,000. Symbiosis has not explained how the recovered 15 BTC relates to that figure. The protocol is now offering a 20% bounty to anyone whose information leads to asset recovery, after an earlier 20% white-hat offer to the attacker expired on Sunday. Symbiosis also said it will disclose a compensation framework for affected liquidity providers. DeFiLlama has estimated losses at roughly $336,000, though the protocol has yet to publish a final accounting. The incident adds to a recent run of bridge-related exploits, including the Secret Network and Verus-Ethereum cases earlier this year.

Bitcoin holders who need cash do not always have to sell. They can post BTC-linked assets as collateral and borrow against them, keeping exposure to Bitcoin’s price while unlocking liquidity. The catch is that many crypto lending applications run on other blockchains, so users often rely on custodial wrapped Bitcoin products such as WBTC, cbBTC, or Circle’s cirBTC rather than native BTC itself. That shift changes the risk profile. The borrower is no longer relying only on Bitcoin, but also on a custodian to hold the underlying coins, on redemption rules to work as promised, and on a lending protocol to function correctly. Even if a wrapped token is fully backed, redemption access, settlement delays, regional restrictions, and liquidity across supported markets can all determine whether that token is actually useful as collateral. The article examines how minting and redemption work, why wrapped tokens still track BTC downside, how liquidations can force users to lose Bitcoin exposure without selling voluntarily, and why product differences between WBTC, Coinbase’s cbBTC, and Circle’s cirBTC matter. The central question is not whether a token says it is backed by Bitcoin, but whether the holder can reliably get Bitcoin back.

Kraken introduces Bitcoin Vault, a new product on its Earn platform that automates BTC allocation into Aave, Morpho, and other lending protocols for yield. Backed by Veda and Sentora, it targets long-term holders.

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Wrapped tokens let assets like BTC and BNB move onto non-native blockchains through 1:1 backing. This article covers how they work, the largest wrapped assets, key DeFi use cases, and the risks tied to custody and smart contracts.

Volo Protocol said a compromised vault admin private key led to a $3.5 million loss across three Sui vaults. The team froze all vaults, blocked a 19.6 WBTC bridge-out attempt, and said it will absorb the losses.

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