Another day, another DeFi hack.
BSquared Network [B2], a Bitcoin [BTC] layer 2 protocol, found itself at the center of yet another hack. The network was breached for $3.89 million, while AFX Trade was exploited for more than $24.15 million the same day.
These hacks showed that the DeFi sector is yet to address security concerns despite a myriad of improvements following Kelp DAO’s hack in April.
Inside BSquared Network exploit
As per Lookonchain, BSquared Network was exploited, with 8.59 million B2 tokens worth $3.86 million stolen. The hacker sold all the tokens for 5,409 WBNB and 156 BNB, valued at $89.68K. These funds were then bridged to the Ethereum [ETH] network before being swapped for ETH and USDT.
The hacker is now moving the stolen funds to ZCash [ZEC] via Near Intents and HOT Protocol. Currently, 200 ETH, worth more than $387K, has been moved to Near Intents’ bridged wallet.
Such a move suggests that hackers are laundering to mitigate cash-out risks or recovery chances.
On-chain investigator Specter suggested the exploit was likely an inside job. The address involved had held the required role since 2025, which was only revoked after the draining occurred.
What does the team’s response mean to holders?
In response to the hack, the BSquared team cited unauthorized access to the smart contract’s upgrade authority as the source of the attack.
In line with security audits, BSquared Network noted,
As a precaution, $B2 staking has been temporarily suspended while we complete additional security reviews.
The team further laid out compensation plans, a relief to stakers of the B2 token. They wrote,
All affected users will be fully compensated.
In response to the allegation of an inside job, the team sent an on-chain message to the hacker, according to Specter. The message read,
If you return at least 10% of the stolen funds (approximately 386,000 USD) within the next 24 hours to this address…will not initiate legal proceedings… The choice is yours.
B2 token plunges 44% but recovers significantly
Following the capital flow into the Ethereum network from the BNB Chain, B2 instantly lost over 40%. However, the price drop later corrected, with the token down 17% at press time, trading at the $0.4351 support level.
While the B2 token’s correlation with BNB was starting to pick up after the exploit, the MACD showed that bears were in control. However, more capital outflow would lead to a further decline in the token, but if recovery efforts succeed, the B2 price might stabilize.
Final Summary
- BSquared Network exploited over $3.89 million, swapping it for ETH and USDT as the B2 token crashed 40% after the hack.
- The BSquared team announces compensation plans as they start recovery efforts.
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