Garden Finance Suspends App Following Independent Solver Database Breach

Garden Finance Suspends App Following Database Breach

Garden Finance has taken its application offline following a compromise of an off-chain database related to an independent solver. The breach resulted in significant losses of assets owned by the solver but left the protocol’s contracts and user funds intact.

Details of the Compromise

The attack allowed the perpetrator to drain approximately $450,000 in USDT through hash time-locked contracts (HTLCs) across multiple blockchains, including Ethereum, Base, Arbitrum, and BNB Smart Chain. Blockchain security firm Blockaid initially identified the exploit while tracking the illicit activities.

No Direct Impact on User Funds

Despite the loss of assets, Garden Finance confirmed that the protocol’s smart contracts and user funds were not compromised. The breach was restricted to the infrastructure of the independent solver where the fraudulent records were inserted, causing the release of funds without the necessary counterparty deposits.

Emergency Response and Recovery Efforts

In light of the incident, Garden Finance engaged several blockchain security firms, including zeroShadow, Quantstamp, and Blockaid, to aid in tracing the stolen assets and initiate recovery processes. The activity prompted the protocol to suspend its services temporarily until the team could assess the full scope of the breach and secure the affected infrastructure.

Assurance to Users

Garden Finance reassured users that only assets owned by the affected solver were lost. The company highlighted that their HTLC smart contracts had operated as intended throughout the incident, indicating that this breach was an isolated event within the broader decentralized network.

Context of Recent Security Incidents

The timing of this incident follows a prior breach in June involving another independent solver that reportedly resulted in losses of approximately $11.4 million. As the cryptocurrency sector continues to witness security challenges, Garden Finance has emphasized its ongoing commitment to security, including a recent SOC 2 Type II attestation, underscoring their dedication to operational controls and security processes.

Looking Forward

As investigations continue, Garden Finance expects to restore normal operations once all necessary security evaluations are completed. The situation remains fluid, with updates to be provided as the company navigates this complex issue.