Allbridge Halts Core Bridge After Flash Loan Attack
Cross-chain bridge protocol Allbridge suspended its Core bridge after detecting unauthorized activity that resulted in losses of about $1.65 million, prompting an investigation into one of the latest attacks targeting decentralized finance infrastructure.
Summary:
- The attacker exploited Allbridge’s pricing model instead of its smart contracts or bridge infrastructure.
- The incident highlights how flash loans continue to expose weaknesses in decentralized liquidity pools.
- Allbridge halted Core bridge operations while engineers review the affected pool design.
- The exploit adds pressure on DeFi protocols to strengthen economic safeguards alongside code security.
How the Attack Worked
Data from Solscan, points that the attacker began the exploit with a $1.12 million USDC flash loan from Kamino on Solana.
The attacker immediately used the borrowed funds to execute a series of large USDC and USDT swaps against Allbridge Core’s liquidity pools. Those trades pushed the pools out of balance and temporarily distorted exchange rates.
The attacker then exploited the pricing discrepancy instead of attacking the bridge itself. By combining liquidity provision with additional swaps, the attacker withdrew assets worth more than the original position before repaying the flash loan in the same transaction.
Blockchain analysts from CertiK estimate the strategy generated roughly $1.65 million in profit.
We have seen a security incident on Allbridge Core Solana.https://t.co/HvLDMqGxSF
~$1.65M assets were stolen and bridged to an Ethereum address
0x651591b68A9c9650FB23F642162353306281ffDe before further dispersion.Stay Vigilant!https://t.co/GwVbxS2Iy9 pic.twitter.com/6WCoVK4jZA
— CertiK Alert (@CertiKAlert) July 20, 2026
The attacker later transferred the funds from Solana to Ethereum and converted them into Ethereum. Moving assets across multiple blockchains remains a common tactic because it complicates tracking and recovery efforts.
Allbridge suspended its Core bridge shortly after security researchers detected the exploit. The company is reviewing the pricing mechanism inside the affected stablecoin pools. So far, it has not reported any compromise of its validator network, bridge messaging or smart contract permissions.
DeFi Attacks Are Shifting Toward Market Design
The exploit reflects a broader change in decentralized finance.
Earlier bridge attacks often targeted validator keys, cross-chain messaging systems or smart contract vulnerabilities. Today, attackers increasingly focus on the financial logic that determines how protocols price and exchange assets.
READ MORE: New macOS Malware Campaign Targets Crypto Wallet Users
Automated market makers sit at the center of that shift. These systems calculate prices from liquidity inside the pool rather than from traditional order books. Large trades can temporarily distort those calculations if a protocol lacks sufficient safeguards.
Flash loans amplify the risk. They give traders immediate access to large amounts of capital without requiring collateral. Attackers can manipulate pool balances, complete the exploit and repay the loan before a single blockchain transaction finishes.
As a result, developers now face a broader security challenge. Writing secure smart contracts is no longer enough. Teams must also test pricing formulas, liquidity models and swap limits under extreme market conditions.
Allbridge’s investigation will likely focus on those economic safeguards. Engineers are expected to review whether additional protections—such as circuit breakers, tighter swap limits or revised pricing formulas – can prevent similar attacks while preserving normal market activity.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
