LayerZero Flaw Lets Attacker Mint 5B $GAIN, Triggering 84% Crash

The Griffin AI native token $GAIN experienced a catastrophic security breach following its listing on Binance, with attackers exploiting a vulnerability in the LayerZero cross-chain bridge to mint 5 billion counterfeit tokens. The incident triggered an 84% price collapse within 24 hours, reducing the token’s value from $0.16 to $0.17 and eroding 81.66% of its market capitalization to $4.6 million. CertiK, a blockchain security firm, confirmed the exploit involved the creation of a fraudulent LayerZero Peer on Ethereum, enabling the attacker to bridge the counterfeit tokens to Binance Smart Chain (BSC) for liquidation.

On-chain analytics platform Lookonchain tracked the attacker’s movements, revealing that 2,956 BNB ($3 million) was generated from the sale of the 5 billion tokens. The proceeds were subsequently converted to Ethereum and laundered through Tornado Cash, a privacy-focused crypto mixer. The attack’s sophistication underscores the risks of cross-chain bridges and token minting vulnerabilities, with CertiK noting that the attacker leveraged the exploit to manipulate liquidity and trigger panic selling.

The incident has raised critical questions about the security of decentralized protocols. The sudden influx of 5 billion tokens into circulation diluted the asset’s value and triggered a 400% surge in trading volume, exacerbating price instability. CertiK highlighted that the attack exploited a fundamental flaw in LayerZero’s peer initialization process, a vulnerability that could have broader implications for other cross-chain assets.

The Griffin AI token’s collapse has drawn parallels to recent exploits in the crypto space, emphasizing the fragility of projects with inadequate security audits. Lookonchain’s analysis of the attacker’s wallet addresses—0x107E83EBE677DDec253C440127F23310720177c2 and 0xB31BDDb3d1c2b45E5c5fE149Aa4c8304e9D1916C—suggests the funds are unlikely to be recovered, given the use of privacy tools.

Industry experts warn that such incidents erode investor confidence and highlight the need for stricter protocol governance. The Griffin AI exploit serves as a cautionary tale for both developers and users, demonstrating how a single vulnerability can lead to systemic losses in a matter of hours. As the market digests the fallout, the incident may accelerate demand for enhanced security measures and third-party audits in the DeFi ecosystem.

Source: [1] Hack Turns $GAIN Into Pain, Griffin AI Token Crashes 84% (https://www.cryptotimes.io/2025/09/25/hack-turns-gain-into-pain-griffin-ai-token-crashes-84/)