Syscoin has suspended its cross-chain bridge service. This followed a security incident where approximately 5 billion unauthorized SYS tokens were abnormally generated. In their initial review, the team stated that the issue stemmed from the verification phase of the bridging process, where the system incorrectly accepted a transaction proof.

The vulnerability lies in the verification process.

According to the project team, the attackers exploited a verification flaw in the cross-chain bridge process, causing the system to treat transaction proofs that should not have passed as valid, and generating abnormal outputs through the UTXO Bridge path. These tokens were not obtained through normal issuance.

Following the incident, Syscoin has suspended the Bridge service and advised users not to continue using the bridging function until further notice.

The irregular funds have been dispersed and transferred.

The project team stated that the funds were subsequently transferred and split into multiple addresses. Two main tainted wallets have been traced, one holding approximately 4 billion SYS and the other approximately 1 billion SYS.

This means that the abnormally generated tokens have entered the on-chain circulation stage, and the subsequent handling will focus on address tracking, cooperation with trading platforms, and related asset restrictions.

The project team stated that a repair plan has been prepared.

Syscoin stated that the team has identified the cause of the issue and has prepared remedial measures. They are currently collaborating with exchanges and ecosystem partners to monitor, freeze, or blacklist affected funds to limit the further spread of the abnormal tokens.

As of now, the project team's disclosure is still in the preliminary review stage, and the resumption time for bridging services has not yet been announced.