Cross-chain oracle compromise triggers liquidations and frozen vaults across multiple DeFi networks

BREAKING: A cross-chain oracle compromise triggers mass liquidations and frozen vaults across multiple DeFi networks, with Full Sail confirming vault losses, Virtue reporting 47 liquidations and Volo pausing withdrawals.

An attacker priced one IOTA token at ten million dollars, and DeFi believed it.

Switchboard, an oracle that feeds price data to apps across Aptos, Sui, IOTA and Movement, was compromised in its Move-language deployments overnight. On IOTA, the attacker seized the signing keys of all fourteen oracles, deposited exactly one IOTA, and minted nearly five million dollars of the VUSD stablecoin. Then the feed got shoved near zero, triggering 47 liquidations at credit protocol Virtue and hitting 45 users. Virtue says VUSD is now materially undercollateralized.

On Sui, the exchange Full Sail confirmed its vaults lost funds, no number given, and froze deposits and withdrawals. Volo paused withdrawals too as a precaution, though it says user funds are safe.

Switchboard still hasn't published a root cause, a restore timeline, or even a full list of who's exposed. One compromised price feed, and four chains are frozen waiting for answers. That's the whole trust model, gone in an afternoon.

This is Sara White, reporting for HIT.