Nomad, a cross-chain token bridge backed by a number of high-profile crypto and corporate venture firms, suffered an exploit on Monday that drained nearly $200 million of its funds.
Why it matters: The exploit is another warning sign to VCs signing checks over to fast-growing crypto startups, especially companies that promise the very best in security. Buyer beware.
Driving the news: Late on Monday, reports emerged that hackers had taken almost all of the Nomad bridge’s available funds.
- The company confirmed the hack in a tweet: “We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them.”
Yes, but: The full extent of the damage is still unknown, as Nomad claims some of the funds were taken by white-hat hackers who acted preemptively to secure tokens with the intent of returning them once the exploit had been addressed.
Catchup quick: The company raised a $22.4 million seed round in April, with backing from Polychain Capital, Circle Ventures and Robot Ventures.
Background: Cross-chain bridges are an attractive target for hackers. In April, Axie Infinity’s Ronin bridge suffered a $600 million attack that the U.S. Treasury Department traced to North Korea.
- In February, hackers stole over $300 million from the Wormhole bridge, a heist that hit the Solana blockchain community.
Of note: “Nomad sold investors on the vision that it would be fundamentally more secure than alternative platforms,” Coindesk says.
What we’re watching: How much, if any, of Nomad’s funds can be recovered — and whether existing investors or others will step up to backstop the company in the meantime.