Sandbox Halts Base and BNB Bridging After Exploit

The attack only hit the bridges to Base and BNB Smart Chain; Ethereum and Polygon were left untouched. Exchanges like Bithumb and Upbit also paused SAND deposits and withdrawals.

Key Takeaways

• Sandbox halted bridging to Base and BNB Smart Chain after an exploit that let unbacked SAND tokens be minted.
• The company is warning users not to buy, sell, or trade SAND on Base and BNB because liquidity there has been affected.
• Sandbox says Ethereum and Polygon were not hit and is working on compensation for eligible users of the affected liquidity pools.

Sandbox halted bridging to Base and BNB Smart Chain after an exploit was discovered that let an attacker mint unbacked SAND tokens on those networks. The crypto company said the affected tokens can no longer be moved or redeemed, and warned users not to buy, sell, or trade SAND on Base and BNB because liquidity there has been affected.

What Went Wrong

According to Sandbox, the attack was used to bridge a total nominal value of about $49 billion (€41.9 billion) in unbacked tokens. That does not mean that that much money was actually stolen. It refers to the market value of the tokens based on the SAND price, while the liquidity available to actually sell those tokens was much smaller.

Blockaid reported that it had already spotted the exploit during the attack. The security firm said the attacker minted unbacked SAND tokens through LayerZero delegate permissions and an approveAndCall function. PeckShield later said 14.9 billion SAND were involved across two addresses. Those figures are not directly comparable because they were measured at different times and reflect the nominal creation of tokens, not confirmed losses.

Sandbox also said the SAND tokens on Ethereum and Polygon were not affected. No user wallets were compromised either, and the SAND locked on Ethereum as collateral remains intact.

Impact on SAND Trading

The SAND token has a market value of about $136 million (€116 million) and a total supply of 3 billion tokens. Sandbox said the impact affects less than 0.01% of that supply, which works out to less than 300,000 SAND if you compare it directly with the supply.

The disruption also hit trading on exchanges in South Korea. Bithumb and Upbit suspended SAND deposits and withdrawals after reporting suspected security issues. Sandbox said it is taking a snapshot from before the incident and is working on compensation for eligible users of the affected liquidity pools. A technical debrief will follow later.

Why This Matters More Broadly

The case shows how vulnerable cross-chain bridges still are, a part of the crypto market that has been targeted by exploits in DeFi before. A similar attack recently hit another bridge too, where a flaw in deposit checks led to the minting of unbacked tokens and the service being shut down. For European crypto investors, the key point is that a problem on one chain can quickly spill over to multiple networks and trading platforms. Sandbox has also dealt with phishing incidents before involving hacked email and social media accounts, which has only increased attention on security around the project.