Arbitrum-Based AFX Trade Loses $24 Million in Exploit Attack

AFX Trade, a decentralized finance (DeFi) protocol operating on the Arbitrum network, recently experienced a significant security breach when an attacker exploited its bridge infrastructure. The breach resulted in the withdrawal of approximately $24.15 million from its custody contract.

The incident was revealed through on-chain analysis and involved an unusual bridge withdrawal that raised concerns about validator security, rather than a failure in the bridge’s core logic.

AFX Bridge’s Million-Dollar Attack

The exploit targeted the bridge system operated by AFX, which is responsible for facilitating asset transfers between networks while relying on validator approvals for transaction execution. Unlike traditional attacks where hackers exploit coding flaws or manipulate smart contracts directly, this incident involved the misuse of legitimate authorization pathways. 

Notably, the bridge’s underlying logic remained intact, meaning the attacker did not break the system’s rules or force an invalid transaction through the network. Instead, the malicious withdrawal was accepted after receiving enough signatures from hot validators responsible for approving bridge operations. 

After receiving the required approvals, the withdrawal passed the bridge’s dispute window before being completed, leaving limited options to stop the transaction. The movement of funds was later identified by blockchain observers who traced the suspicious transaction and linked it to the AFX bridge breach.

Rising DeFi Security Crisis

The AFX team confirmed that it was aware of the incident and had begun efforts to address the situation. The protocol has taken additional steps to reach out to the attacker with a proposal to recover the stolen funds.

Our focus remains on protecting our community and maximizing the recovery of user assets.

We continue to work closely with leading security firms, ecosystem partners, exchanges, and relevant authorities to monitor fund movements and support the ongoing investigation. We will… https://t.co/YF1rmwpkRH

— AFX Trade (@AFX_XYZ) July 23, 2026

Notably, white hat bounties have played a significant role in recovering stolen funds. In several past cases, blockchain projects have offered negotiated rewards to exploiters instead of engaging in lengthy legal disputes or complex recovery processes. This strategy has proven effective, as some stolen funds have been returned.

Meanwhile, just hours after the AFX incident came to light, on-chain evidence revealed another exploit affecting VerusCoin, a decentralized open-source blockchain platform. Hackers drained $7.54 million from the protocol’s Ethereum Bridge. The incident marked the bridge’s second major incident in two months, following an $11.58 million exploit in May.

As of now, Verus has not made any public statement regarding the exploit. However, it remains to be seen whether it will adopt the white hat approach as AFX did.

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