IoTeX, a blockchain challenge centered on Web-of-Issues units, supplied a ten% white-hat bounty to the hacker or hackers who exploited a non-public key on its cross-chain bridge ioTube, siphoning hundreds of thousands of {dollars}, in alternate for the voluntary return of funds inside 48 hours.
With this transfer, IoTeX is providing the $440,000 if the malicious actor or actors return roughly $4.4 million they stole, in line with an IoTeX X submit, to which IoTeX co-founder and CEO Raullen Chai pointed “as a supply of reality” on Monday.
Plenty of crypto initiatives have supplied related 10% bounties to hackers after being breached. Hackers someday return funds in alternate for this bounty.
Chai advised CoinDesk that the group despatched an onchain message providing to not pursue authorized motion or share figuring out info with legislation enforcement if the remaining funds are returned.
“That is concerning the ioTube bridge exploit on Feb. 21, 2026,” Chai mentioned within the message. “All fund actions throughout Ethereum, IoTeX, and bitcoin have been absolutely traced.”
The message states that alternate deposits have been flagged and frozen and gives a ten% bounty for the return of remaining funds.
Chai additionally mentioned IoTeX is rolling out a brand new chain model, Mainnet v2.3.4, requiring node operators to improve. The replace features a default blacklist of malicious externally owned account (EOA) addresses.
“This blacklist accommodates a listing of malicious or problematic EOA addresses that might be filtered by the node,” Chai mentioned.
The supply comes after a Feb. 21 exploit during which a compromised validator proprietor personal key enabled unauthorized management over ioTube’s bridge contracts.
IoTeX mentioned the incident is “underneath management,” saying that its Layer 1 blockchain was not affected and that the breach was remoted to the Ethereum-side infrastructure of the bridge.
The IOTX token fell roughly 22% following the exploit, dropping from $0.0054 to under $0.0042 earlier than partially rebounding.
Cross-chain bridges have been certainly one of crypto’s primary failure factors, with a number of high-profile exploits in recent times. In line with business experiences, greater than $3.2 billion has been misplaced resulting from cross-chain bridge hacks, making them a chief goal for superior menace actors.
Duty and key management
IoTeX framed the exploit as an operational concern particular to the bridge reasonably than a failure of its Layer 1 community.
“IoTube is IoTeX’s personal cross-chain bridge constructed and maintained by their group,” Nick Motz, CEO of ORQO Group and CIO of Soil, advised CoinDesk. “The breach got here all the way down to a compromised validator proprietor personal key on the Ethereum aspect, which is basically an operational safety failure, not a sensible contract vulnerability found by an outdoor actor.”
Motz agreed that IoTeX’s Layer 1 was not compromised however mentioned person funds have been entrusted particularly to the bridge.
“Whenever you construct and function the bridge infrastructure and the important thing administration is what fails, it’s troublesome to separate your self from that consequence,” he mentioned.
Nanak Nihal Khalsa, co-founder of human.tech, mentioned duty in crypto usually comes all the way down to key custody.
“Sure, whoever holds the personal key’s answerable for securing it,” Khalsa mentioned. “Is {that a} affordable duty? It’s exhausting to say. However that’s how the business works proper now.”
He added that legal responsibility norms stay unsettled in comparison with conventional finance and referred to as for stronger pockets and multisig setups to scale back related dangers.
The estimates diverge
On-chain evaluation by safety agency PeckShield estimated greater than $8 million price of belongings have been affected, saying the attacker swapped funds into ether (ETH) and commenced bridging them to bitcoin through THORChain.
“The hacker has swapped the stolen funds to $ETH and has began bridging them to #BTC through #Thorchain,” the agency wrote.
One other onchain investigator, Specter, mentioned on X that “the personal key of @iotex_io might have been compromised,” leading to an estimated $4.3 million loss.
“As soon as belongings are routed by THORChain […] restoration turns into extraordinarily troublesome,” Motz mentioned.
IoTeX mentioned it has recognized 4 bitcoin addresses holding 66.78 BTC price roughly $4.3 million at present costs and that the addresses are being monitored in cooperation with exchanges.
A CoinDesk overview of these addresses on Feb. 23 confirmed they held roughly 66.6 BTC.
IoTeX didn’t instantly reply to CoinDesk’s request for remark.
“Containment shouldn’t be the identical as restoration,” he added. “The belongings with precise market worth have been swapped and bridged. These are, in my evaluation, unlikely to be recovered.”
Khalsa equally cautioned that restoration prospects are unsure. “It’s exhausting to foretell how a lot, if any, will be recovered,” he mentioned.
IoTeX revised its determine upward to roughly $4.3 million, reflecting the direct asset drain however excluding minted tokens. Motz mentioned broader estimates might higher seize the severity of the breach.
“Non-public key compromise reasonably than sensible contract bugs is rising as a dominant assault vector,” Motz mentioned, noting that such incidents goal operational safety reasonably than audited code.
Earlier than providing the ten% bounty, IoTeX mentioned a compensation plan could be in place inside the subsequent 48 hours.
UPDATE (Feb. 23, 2026, 23:21 UTC): Provides context on bounties supplied after hacks.
