A major SwapNet smart contract exploit on Base drained approximately $16.8 million in crypto, including 10.5 million USDC stablecoin.
The attacker exploited a vulnerability in the smart contract, swapped the USDC for roughly 3,655 ETH and began bridging the funds to Ethereum, signaling potential cross-chain movement.
Particular outrage arose from prominent on-chain investigator ZachXBT, who pointed out that $3 million in USDC is still sitting in a freezable address, yet Circle, the issuer of USDC, has taken no public action to halt or recover these funds.
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ZachXBT highlighted the incident, pointing to Circle’s inaction and emphasizing the risks of centralized stablecoins in decentralized finance (DeFi) ecosystems.
“Why should anyone continue building on USDC when you never take care of your users as a centralized stablecoin issuer?” he asked.
According to ZachXBT, there is no legal barrier preventing Circle from freezing the remaining $3 million in USDC, despite the company’s internal, self-imposed policies suggesting otherwise.
He also questioned the credibility of Circle’s incident response, citing past missteps, including a previous leak of KYC data affecting roughly 5,000 users, which has fueled skepticism about the company’s ability to manage security incidents effectively.
No further updates have been announced regarding the attacker’s identity or potential recovery of the funds.
Why This Matters
The SwapNet exploit underscores the risks of relying on centralized stablecoins in DeFi and questions Circle’s ability to protect user funds during crises.
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People Also Ask:
SwapNet is a decentralized exchange (DEX) aggregator that routes crypto trades across multiple liquidity sources to get the best price for users.
A vulnerability in SwapNet’s smart contract on the Base network was exploited, resulting in the theft of approximately $16.8 million in crypto, including 10.5M USDC.
Centralized stablecoins, like USDC, rely on a single issuer for security and governance, creating risks if the issuer fails to act during exploits or mismanages funds.
A smart contract exploit occurs when a hacker takes advantage of a vulnerability in blockchain code, often allowing unauthorized fund transfers.
