Securing Funds: Alex Labs Halts $3.9M Exploitation, Launches Recovery Post BNB Bridge Breach

The team behind Bitcoin layer-2 developer Alex Labs has successfully frozen over $3.9 million in exploited crypto from its BNB Smart Chain bridge. The attacker attempted to cash out by sending funds to various centralized exchanges (CEXs), allowing the team to freeze the assets with the exchanges' cooperation.

According to Alex Labs' May 16 social media post, the recovered funds include balances of 17 different tokens such as aBTC, sUSDT, and xBTC. However, $13.7 million worth of Stacks (STX) tokens were also exploited, with about $3 million sent to exchanges and the remaining $9.6 million still under the attacker's control.

By gaining possession of a secret key connected to one of the bridge's vaults, the attacker was able to access the money. The infrastructure and smart contract code were unaffected, according to Alex Labs. 

Alex Labs offered the attacker a 10% bounty and immunity from prosecution if they returned the remaining 90% of the stolen funds. A police report will be filed if the attacker does not negotiate. The team is considering using $ALEX reserves for a treasury grant program to compensate affected users.

Due to the significant amount of STX tokens involved, Alex Labs may propose a Stacks network upgrade to freeze the remaining funds and mint new tokens for victims. This kind of upgrade is rare but not unprecedented.

Alex Labs continues to monitor the attacker's addresses and has implemented multiple alarms to prevent further cash-outs. The incident follows a similar attack on the XLink bridge, where $10 million was stolen on May 17, with a white-hat hacker recovering $4.3 million.