"SwissBorg’s $41M Loss Exposes DeFi’s Partner Risk"

SwissBorg, a Swiss-based crypto platform, confirmed it suffered a significant security breach involving its Solana (SOL) Earn strategy, resulting in the loss of approximately $41 million worth of assets. According to the firm, the incident stemmed from a compromised external DeFi wallet linked to a partner API. The attack involved the unauthorized withdrawal of around 192,600 to 193,000 SOL, which represents roughly 2% of SwissBorg’s total assets under management [1]. The platform emphasized that user balances in the main app remained unaffected, and the breach impacted less than 1% of its user base [2].

CEO Cyrus Fazel addressed the situation in a live stream, clarifying that the incident was not a direct hack of SwissBorg but an external attack on a trusted partner. Fazel stated, “SwissBorg has not been hacked. There is an external attack from a provider that was unfortunately compromised.” The affected partner is described as one of the best in the world for staking services, underscoring the firm’s commitment to due diligence in partner selection [2]. The stolen funds were drained through the compromised API, and the platform immediately suspended SOL Earn redemptions to contain further losses [1].

In response, SwissBorg has initiated a comprehensive recovery operation. The company has allocated its own treasury funds to compensate affected users, ensuring that no user will bear the loss. It has also engaged white-hat hackers, security partners such as Fireblocks, and law enforcement to trace and recover the stolen funds [1]. Multiple exchanges have blocked transactions linked to the attack, helping to prevent the immediate liquidation of stolen assets. Additionally, SwissBorg is working with blockchain analysts and the Solana Foundation to track the stolen SOL across multiple wallet addresses [2].

Transparency has been a key focus of SwissBorg’s response. The firm is providing frequent updates to the public through social media and has committed to issuing a full incident report after the investigation concludes. Affected users are being contacted directly via email to provide clarity and support [1]. Fazel has pledged to maintain open communication with the community and has announced plans to conduct live updates on YouTube to address user concerns and share progress [1].

Despite the magnitude of the breach, SwissBorg has emphasized that the platform’s overall financial health remains stable. The incident did not affect other Earn programs or the broader user fund pools, reinforcing the company’s layered security approach. Fazel described the event as a learning opportunity and acknowledged the emotional impact on users, stating, “It’s never easy to be like, oh shit, I just lost some of your funds.” However, he added that such challenges highlight the strength of the firm’s community and its commitment to user trust [2].

Looking ahead, SwissBorg plans to implement enhanced security protocols and continue its collaboration with global law enforcement. The company is determined to recover the stolen funds and prevent future vulnerabilities. As the investigation unfolds, the firm remains focused on restoring full confidence and ensuring the long-term resilience of its platform.

Source:

[1] SwissBorg Loses $41M in SOL Hack (https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/swissborg-loses-41m-in-sol-hack/)

[2] SwissBorg loses $41M in SOL after partner API ... (https://cryptoslate.com/swissborg-loses-41m-in-sol-after-partner-api-compromise-affects-earn-program/)