DeFi’s Cross-Chain Security Blind Spot Exposed by $36M GAIN Exploit

Griffin AI’s GAIN token suffered a catastrophic exploit on September 24, 2025, as attackers minted an additional 5 billion tokens—far exceeding the project’s 1 billion token cap—leading to an 87% price plunge and a $36 million market capitalization collapse. The attack exploited a misconfigured LayerZero peer on Ethereum, enabling unauthorized minting and cross-chain bridging of tokens to Binance Smart Chain (BSC), where the majority were sold within hours Griffin AI Token Crash: 90% Drop After Exploit - capwolf.com^[2]. By 24 hours post-exploit, the token’s price had dropped from $0.25 to $0.0273, while trading volume surged 133% to $100 million, reflecting panic selling and arbitrage activity Griffin AI Token Crash: 90% Drop After Exploit - capwolf.com^[2].

The exploit involved deploying a counterfeit LayerZero peer to bypass cross-chain security checks, allowing the attacker to mint 5 billion GAIN tokens on BSC. These were rapidly liquidated for 2,956 BNB ($3 million) via PancakeSwap and over-the-counter trades, with proceeds laundered through Tornado Cash and deBridge across networks like Ethereum and Arbitrum Griffin AI Token Crash: 90% Drop After Exploit - capwolf.com^[2]. On-chain analytics platforms such as Lookonchain and CertiK confirmed the attack’s mechanics, noting the use of privacy tools to obscure the attacker’s identity Hack Turns $GAIN Into Pain, Griffin AI Token Crashes 84%^[3].

Griffin AI’s market impact was severe. The project’s market cap fell from approximately $42.4 million to $6.4 million, eroding nearly 81.66% of its value in a single day Hack Turns $GAIN Into Pain, Griffin AI Token Crashes 84%^[3]. The token’s circulating supply ballooned from 235 million to 5.235 billion, diluting existing holders and triggering a loss of investor confidence. Exchanges including Binance Alpha, KuCoin, and HTX suspended GAIN trading to mitigate further losses, with the Griffin AI team urging users to avoid unauthorized liquidity pools Griffin AI (GAIN) Plunges 87% Following Mint-and-Dump Attack^[4].

Security experts highlighted the exploit’s similarity to prior DeFi attacks, underscoring vulnerabilities in cross-chain protocols. GoPlus Security noted that the breach likely stemmed from an insider or social engineering attack, as the attacker added a fake LayerZero peer to Ethereum Griffin AI (GAIN) Plunges 87% Following Mint-and-Dump Attack^[4]. This incident reinforces broader concerns about the risks of rapid deployments and inadequate post-launch audits in decentralized finance.

The Griffin AI team has initiated investigations with security partners and requested exchanges to pause GAIN activity. However, rebuilding trust remains a significant challenge. Analysts caution that the project’s ability to recover will depend on transparent governance, token burn mechanisms, or new contract deployments to address the exploit’s aftermath Griffin AI (GAIN) Plunges 87% Following Mint-and-Dump Attack^[4].

The attack serves as a stark reminder of DeFi’s evolving security landscape. Cross-chain systems, while enabling interoperability, introduce complex vulnerabilities that attackers can exploit. Experts emphasize the need for robust post-deployment audits, multilayered security protocols, and community-driven oversight to mitigate such risks. For investors, the incident underscores the importance of due diligence, diversification, and real-time monitoring of project developments Griffin AI Token Crash: 90% Drop After Exploit - capwolf.com^[2].