The Cronos blockchain — associated with Crypto.com — had to halt all trading activity on August 31 after a price-manipulation exploit drained its largest lending protocol, Tectonic. The attacker artificially inflated the price of Tectonic’s native TONIC token by 100 times within 20 minutes, then used the overvalued tokens as collateral to borrow $74 million worth of real cryptocurrency assets. Blockchain security firm PeckShield confirmed the attack; because the borrowed funds were effectively locked on the halted Cronos chain, the attacker was only able to withdraw roughly $6 million in Ethereum before the network shut down.
Tectonic is a decentralised finance (DeFi) lending platform built on Cronos that allows users to deposit crypto and borrow against collateral — a model that is vulnerable to “oracle manipulation” attacks when the price feed for a token can be moved quickly. Before the incident, Tectonic held $122 million in total value locked; that figure fell to under $3 million after the exploit. Cronos resumed operation once it isolated the attack, and Tectonic has advised users not to interact with the protocol until the platform publicly confirms it is safe.