Hacker diverts US$ 3.9 million from Unleash Protocol and hides funds via Tornado Cash

Source: PortaldoBitcoin Original Title: Hacker Steals $3.9 Million from Unleash Protocol and Hides Funds via Tornado Cash Original Link: The cryptocurrency market faces a new attack on its records: Unleash Protocol was drained of $3.9 million, which were converted into Ethereum and then hidden through Tornado Cash. The information comes from blockchain security firm PeckShield.

The hacker managed to steal the amount in WIP, USDC, WETH, stIP, and vIP tokens. These cryptocurrencies were converted into a total of 1,337.1 ETH on Tornado Cash, using bridge systems (bridges) to move assets between different blockchains and protocols.

The intellectual property funding platform built on the Story ecosystem, Unleash Protocol had reported the security incident but did not disclose the stolen amounts.

“Earlier today, we detected unauthorized activity involving Unleash Protocol’s smart contracts, which led to the withdrawal and transfer of user funds,” the platform stated. “Our initial investigation indicates that an external address gained administrative control through Unleash’s multisig governance system, enabling an unauthorized contract update that allowed withdrawals outside approved governance procedures.”

According to Unleash itself and on-chain monitoring company LookonChain, the incident is not related to a technical flaw in the Story Protocol but rather to issues in the governance model adopted by Unleash.

As a preventive measure, the platform temporarily suspended all activities while investigations are ongoing, with the support of independent security and forensic analysis experts. The team also recommended that users avoid any interaction with the protocol’s contracts until new guidance is issued through official channels.