Shibarium Hit By $2.4M Flash Loan Exploit After 10 Validator Keys Are Compromised

Shibarium lost $2.4 million after an attacker gained control of 10 out of 12 validator keys.

Developers paused staking and moved funds to a secure wallet to stop further damage.

A $23,000 bounty was offered to recover stolen assets without involving legal action.

Shiba Inu’s Shibarium network suffered a major security breach on Friday. An attacker used a flash loan to borrow 4.6 million BONE tokens. This allowed them to gain control of 10 out of 12 validator signing keys. With two-thirds control, the attacker authorized malicious transactions.

The breach led to the loss of approximately 224.57 ETH and 92.6 billion SHIB tokens. These assets were quickly moved to the attacker’s own address. The exploit impacted Shibarium’s cross-chain bridge infrastructure, which relies on validator consensus

Response Measures and Containment Steps

Shiba Inu developers responded by pausing key network functions. They froze staking and unstaking operations as a precaution. The team then secured the remaining validator funds in a hardware wallet. The wallet uses a 6-of-9 multisig setup to prevent further unauthorized access.

The stolen BONE tokens remain locked due to unstaking delays. This mechanism prevents the attacker from immediately using or transferring them. Developers are using this delay to trace the attacker and monitor movements.

Security firms Hexens, Seal 911, and PeckShield have joined the investigation. They are analyzing the breach to determine whether it came from a server vulnerability or a developer device.

Bounty Offer and Negotiation Efforts

Shiba Inu’s team has contacted authorities to report the incident. However, they remain open to resolving the matter directly. The team offered the attacker a bounty worth 5 ETH, or roughly $23,000, for asset recovery.

The bounty remains open for 30 days, with terms set to change after seven days. Developers stressed that once the offer is accepted, it becomes irreversible. The protocol aims to settle the matter without legal action if funds are returned.

Efforts continue to prevent further damage. The team plans to restore functionality once validator control is fully resecured. The attack highlights persistent security risks across cross-chain DeFi bridges.

Market Reaction and Network Impact

Following the exploit, tokens across the Shiba Inu ecosystem saw price drops. SHIB declined by 7%, falling from $0.0000145 to $0.0000131. BONE experienced a sharper drop, falling 38% to $0.19. K9 Finance (KNINE) also dropped 10%, indicating broader market concern.

The Shibarium team stated that network security remains its top priority. In June, Shiba Inu updated the Shibarium hub to guide developers and support easier validator setup on the Ethereum Layer 2 network. Only a complete evaluation and installation of increased safeguards will bring full operations back. This case highlights the need for strong validator security in decentralized networks.