SwissBorg Hacked for $41M SOL After Third-Party API Compromise
SwissBorg, a Switzerland-based crypto wealth management platform, has been hit with a significant security breach after hackers exploited a vulnerability in the API of its staking partner Kiln, draining approximately 193,000 Solana tokens from its Earn program. The incident resulted in losses worth roughly $41 million at the time of writing.
The breach originated with Kiln, a staking infrastructure provider that powers yield products on blockchains such as Solana and Ethereum. An API attack targeted the software "bridge" that connects two systems. In SwissBorg's case, its app relied on Kiln's API to communicate with Solana's staking network.
By compromising the API, hackers were able to manipulate requests and siphon off funds. However, SwissBorg has assured users that the breach did not impact their daily operations, and the company remains in good financial health.
The affected users account for about 1% of SwissBorg's customer base and 2% of total assets. The company has pledged to reimburse the affected users, stating that "with the current treasury we have, we could already do that."
SwissBorg's CEO, Cyrus Fazel, described the incident as "a bad day" but not a fatal blow. He noted that while it was a significant amount of money, it did not put SwissBorg at risk. Fazel emphasized that the company is working closely with international agencies, exchanges, and white hat hackers to assist with the investigation.
Blockchain data shows that the stolen funds were routed to a Solana wallet now labeled as the "SwissBorg Exploiter." The company has advised users to exercise caution when interacting with this wallet.
"It's a big amount of money, but it doesn't put SwissBorg at risk," Fazel said. He also highlighted that the incident will ultimately serve as a learning experience for the company, ensuring that such incidents do not happen in the future.
How the Hack Happened
The hack was made possible by a vulnerability in Kiln's API. An API attack targets the software "bridge" that connects two systems. In SwissBorg's case, its app relied on Kiln's API to communicate with Solana's staking network.
By compromising the API, hackers were able to manipulate requests and siphon off funds. This highlights the importance of having robust security measures in place, especially when working with third-party services.
What SwissBorg is Doing
SwissBorg has taken several steps to address the incident:
- Reimbursement: The company has pledged to reimburse affected users.
- Investigation: SwissBorg is working closely with international agencies, exchanges, and white hat hackers to assist with the investigation.
- Prevention: The company is taking steps to prevent similar incidents in the future.
Retail Users Urged to Exercise Caution
The incident has highlighted the importance of caution when interacting with wallets and exchanges. Retail users are advised to:
Exercise caution when interacting with unknown wallets or addresses.
Regularly monitor their account activity for any suspicious transactions.
A "Bad Day" but Not a Fatal Blow
Cyrus Fazel, SwissBorg's CEO, described the incident as "a bad day" but not a fatal blow. He noted that while it was a significant amount of money, it did not put SwissBorg at risk.
"It's a big amount of money, but it doesn't put SwissBorg at risk," Fazel said. He also highlighted that the company is working closely with international agencies, exchanges, and white hat hackers to assist with the investigation.