Blockchain tokenization platform Holograph saw its native token, HLG, plummet by nearly 80% after a hacker exploited the protocol’s operator contract to mint 1 billion HLG tokens worth $14.4 million. This incident caused a drastic drop in HLG’s value, severely impacting the token’s market cap.
Holograph’s official X account confirmed the breach on June 14, announcing that the initial exploit had been patched and that efforts were underway to work with cryptocurrency exchange partners to freeze the hacker’s accounts. The company has also launched its own investigation and is coordinating with law enforcement.
How the Exploit Occurred
The hacker minted 1 billion HLG tokens in nine separate transactions, exploiting a vulnerability in a smart contract. According to Etherscan, the first mint took place on June 13 at 9:47 am UTC. Seven of these transactions involved 100 million tokens each.
It took only 10 minutes for HLG’s price to begin its steep decline. Within nine hours, the token’s value had dropped from $0.014 to a local low of $0.0029, resulting in a market cap decrease from nearly $22 million to $4.8 million, as reported by CoinGecko. HLG has since recovered slightly to $0.008.
Impact and Response
At current prices, the 1 billion HLG tokens are worth $7.4 million. However, the hacker had already started converting the minted HLG into the stablecoin Tether about four hours after the initial exploit.
Cryptocurrency researcher Matt Casto from CMT Digital suggested that the hacker might be a “rogue dev” who funded Holograph’s operator contract address 26 days prior to the exploit. Holograph has not yet responded to inquiries regarding the hacker’s identity.
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About Holograph
Holograph operates within the Omnichain ecosystem, allowing tokens to move between blockchains while maintaining the same contract address. This feature enables asset issuers to index cross-chain data effectively. The platform has received venture capital funding from prominent firms such as Animoca Brands and Mechanism Capital.
Broader Context
Since the first reported industry hack in June 2011, nearly $19 billion in cryptocurrencies have been stolen, according to a recent Crystal Intelligence report. This latest incident with Holograph underscores the ongoing vulnerabilities within the cryptocurrency sector and the need for robust security measures.
