The recommendation came six days after the patch shipped without a security advisory. KiiChain, one of three chains drained, says the sequence cost it 148 million tokens and that two of the three underlying defects remain unfixed upstream.
Cosmos Labs recommended on Tuesday that any public blockchain running a version of its Cosmos EVM module below v0.6.2 or v0.7.2 “immediately halt the blockchain and upgrade it to include the patches in those releases.” The post went up at 11:19 a.m. New York time and asked teams that have not shared security contacts to write to security@cosmoslabs.io “to receive critical updates.”
The recommendation reaches an unknown number of networks that share one open-source codebase. Three chains that run it — MANTRA, TAC and KiiChain — were attacked between Aug. 20 and Aug. 22, and two are still frozen. Cosmos Labs has published no security advisory for the flaw.
KiiChain has put the only numbers on the damage. An attacker drained 148 million, KII from wallets on the chain on Aug. 22, “repeating the same technique 18 times against different targets,” the team said in an incident report published Aug. 24. That is worth roughly $9.7 million at the $0.0653 KII traded at 21:00 UTC that day, per CoinGecko. KiiChain halted the network at block 9,355,723, timestamped 22:50:58 UTC. A public node showed that block still as the chain tip on Tuesday afternoon, 66 hours later.
About 80.7 million KII, or 54.4%, sits in attacker addresses the halt immobilized and will be moved to recovery wallets at restart, the report said. The other 67.6 million was bridged to BNB Smart Chain through Hyperlane, where 64.6 million was sold on decentralized exchanges for roughly 1.61 million BUSD. A final 3 million went to a KuCoin deposit address; KiiChain said “confirmation is still pending” on whether it can be recovered.
The Vesting Account Trick
“The vulnerability is in Cosmos code, not KiiChain code,” the report said. Three upstream defects had to line up: an underflow in the staking precompile when it writes a post-delegation balance back to the EVM, plus two bugs KiiChain says are still undisclosed. The chain runs the module unmodified.
An ordinary wallet cannot reach the flaw, because it cannot delegate more than it can spend. KiiChain says the attacker computed the address its exploit contract would deploy to, converted that address into a vesting account, then deployed the contract onto it. The contract inherited vesting status, delegated one wei more than its spendable balance, and underflowed its mirrored EVM balance to roughly 2^256. Total supply was never inflated, and each drain was capped at the victim’s real balance.
Any Cosmos EVM chain with vesting accounts enabled carries the same exposure, according to the report, “which is why Mantra and TAC were compromised the same week by the same class of attack.”
‘This Loss Was Avoidable’
KiiChain’s report accuses Cosmos Labs of handling the disclosure in a way that created the window it was robbed in.
Cosmos Labs published a fix for one of the three defects in a public repository on Wednesday, Aug. 19, the report said. “Publishing a security fix in the open, before the chains running that code have been told privately and given time to patch, hands the vulnerability to anyone reading the commit. Standard responsible disclosure exists precisely to prevent this.” Cosmos Labs “gave no advance notice to downstream chains, did not flag the release as security critical, and did not tell affected chains that a public release had happened until Friday 21 August, two days later,” the report said.
The halt recommendation, according to KiiChain, “was not made until Saturday 22 August, after Mantra, TAC and KiiChain had all been compromised.” The report argues that instruction mattered more than the code: “A patch takes days to review, build, test and roll out across a validator set. A halt takes minutes.”
The v0.6.2 and v0.7.2 release notes name a pull request that moves test deployments off module accounts, and the changelog at both tags spells out what changed: “contract creation bumps the sender’s nonce, SetAccount persists nonce and balance together, and the EVM commit path may not write a module account’s balance.” Both releases carry the same boilerplate, that they contain “important security fixes” and are “state breaking,” with no CVE, no advisory reference and nothing identifying the entry as a live exploit path. The cosmos/evm advisory page still lists three published advisories, the newest from March.
KiiChain also says the upstream fix is incomplete. “Two of the three defects are still unfixed upstream at Cosmos Labs. Only the underflow has been patched publicly,” the report said. “Any Cosmos EVM chain with vesting accounts enabled that has applied the official upstream fix alone remains exposed to the other two.”
Cosmos Labs has commented on the incident twice, both times on X, and has not responded to KiiChain’s account of the disclosure. Its first post, on Aug. 24 at 1:06 p.m. New York time, said an “ongoing security incident has impacted users of the Cosmos EVM module” and that it had advised chains in contact with it “to request that validators halt their chains.” An incident report will follow “once the situation is resolved.”
TAC Still Down, MANTRA Back
TAC halted at block 24,671,475 on Aug. 22 at 23:58 UTC and remains there, its node showed Tuesday. The Telegram-linked network said an attacker “exploited a vulnerability in the Cosmos EVM precompile layer and drained a single account,” moving 2,985,651,403 TAC between accounts. That is about 62% of the token’s circulating supply, per CoinGecko.
“No tokens were created and total supply is unchanged,” the team wrote, adding that it is working with security collective SEAL 911 and with exchanges. TAC said on Aug. 24 it would publish a post-mortem and relaunch plan the following day; neither had appeared by Tuesday afternoon.
MANTRA is the one chain of the three back online. It halted first, late on Aug. 20 at what its status page puts at block 17,449,398, and says block production resumed at about 05:30 UTC on Aug. 22 on a patched v8.4.0 binary. Chain data shows the gap running from 23:13 UTC on Aug. 20 to 03:38 UTC on Aug. 22. MANTRA marked the incident resolved on Aug. 24, saying the attack “affected two MANTRA-managed wallets” with “no indication that user, exchange, or partner funds were affected.” It has not disclosed an amount and has not published its promised post-mortem.
Chains on the module are still running. The XRPL EVM sidechain pins a fork of v0.6.1 in its node repository, below the floor Cosmos Labs named, and was producing blocks normally on Tuesday afternoon. Cosmos Labs’ own README lists MANTRA and TAC among the module’s users alongside Ondo, Mezo, the XRP sidechain and Stable.
Record Lows Within Minutes
KII plunged by 83% after the chain stopped. It traded at $0.0595 on Tuesday afternoon, down 1.7% on the day and 21% over the week, for a market cap of $19.3 million. The token listed on Aug. 14, and its all-time high of $0.0977 is from that day.
TAC bottomed at $0.000305 on Aug. 23, 88% below the $0.00254 it traded at before the sell-off began on Aug. 22, roughly four hours ahead of the halt. It was up 43% on Tuesday. Its tracked DeFi total value locked fell from $763,256 on Aug. 22 to $593,287 the next day and stood at $589,584 on Tuesday, per DefiLlama. MANTRA traded at $0.0042, flat on the day and down 11.6% on the week, with chain TVL of $537,154, roughly where it was before the halt. DefiLlama does not track KiiChain.
ATOM, unaffected because Cosmos Hub does not run the EVM module, traded at $1.54, up 8.8% on the week.
Second Hit In Seven Months
This is the second exploit of the shared Cosmos EVM codebase this year. In January, an attacker took roughly $7 million from Saga’s EVM network through the ICS20 precompile, according to Cosmos Labs’ ASA-2026-002 advisory. State updates made during recursive calls were not reflected in the outer execution context, letting the same balance be spent more than once in a single transaction. The advisory says the code was introduced upstream in July 2024, that 15 chains were running it, that six did not have the feature enabled, and that one chain was exploited before the rest applied a mitigation. The permanent fix shipped in v0.6.0 in March. Cosmos Labs credited MANTRA among the teams that helped validate it.
KiiChain says it has reproduced two of the three current fixes against the exploit on an isolated localnet and has blocked vesting account creation as a temporary measure. The fixes ship in the restart binary. Neither KiiChain nor TAC has given a date for coming back online.
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