Solana News Today: SwissBorg Loses $41M in Solana—A Cautionary Tale of Third-Party Trust

SwissBorg, a Swiss-based cryptocurrency platform, has reported a significant security breach in its SOL Earn program, resulting in the theft of $41 million worth of Solana (SOL) after a third-party API was compromised. The attack, confirmed by CEO Cyrus Fazel during a live broadcast on Sept. 8, did not originate from an internal breach of the company’s systems but instead involved a vulnerability within one of its staking partners. Fazel emphasized that “SwissBorg has not been hacked,” clarifying that the attack stemmed from an external provider.

According to Fazel, approximately 193,000 SOL—equivalent to $41.3 million—were drained from the platform’s Earn program, impacting roughly 1% of its user base. The stolen funds represent approximately 2% of SwissBorg’s total assets under management (AUM). In response, the company has committed to compensating all affected users, utilizing its own SOL treasury to cover the losses. Fazel confirmed that the firm has the financial resources to fully reimburse the affected parties and is actively working with white-hat hackers and security partners to track and recover the stolen funds.

The compromised API allowed attackers to exploit a trusted third-party provider, a vulnerability that highlights the risks associated with relying on external systems in the cryptocurrency sector. Multiple blockchain exchanges have already blocked transactions linked to the attack, preventing some of the stolen funds from being liquidated. Entities such as Fireblocks, Solana Foundation, and blockchain investigators are assisting in tracing the stolen SOL across multiple wallet addresses. Fazel noted that the incident underscores the importance of continuous security improvements, particularly in the context of third-party integrations.

While the breach has not affected other Earn programs or funds stored in the company’s proprietary app, it serves as a cautionary tale for the broader crypto industry. Fazel described the event as a learning experience and acknowledged the emotional impact it has had on users. He stated, “It’s never easy to be like, oh shit, I just lost some of your funds. But it’s in these times that we realize who has our trusted community.” The CEO has pledged to maintain regular communication with users throughout the recovery process and provided assurances that additional security measures will be implemented to prevent future incidents.

The breach occurred amid a broader wave of supply chain attacks in the crypto space, including a recent incident involving the compromise of an NPM software developer. As a result, industry experts have advised users to exercise heightened caution, particularly those not using hardware wallets. SwissBorg has pledged to work closely with law enforcement agencies globally to address the breach and has reiterated its commitment to user trust and transparency. The company’s response has been viewed as a model for how firms can balance accountability with proactive recovery efforts in the wake of a security incident.

Source: [1] SwissBorg crypto platform robbed of over $40 million in Solana (https://www.theblock.co/post/369924/swissborg-crypto-platform-robbed-of-over-40-million-in-solana?utm_medium=rss&utm_source=companies.xml) [2] SwissBorg loses $41M in SOL after partner API compromise affects Earn program (https://cryptoslate.com/swissborg-loses-41m-in-sol-after-partner-api-compromise-affects-earn-program/)