Nomic Issues 40.650602 nBTC Without Collateral, Osmosis allBTC Collateral Ratio Drops to 63.97%

The issuance of 40.650602 nBTC by Nomic has gone undiscovered for 74 days, resulting in a drop in the collateral ratio of Osmosis's Bitcoin-linked asset allBTC to 63.97%. The attacker exploited a vulnerability in Nomic on June 25 to issue nBTC, and Osmosis discovered the issue during an asset review process after the Nomic chain was halted on September 7. According to the recovery proposal, the issuance was processed through 25 identical IBC transfers in a single Nomic transaction, and the attacker sent false vouchers by double-spending nBTC. Osmosis explained that the vulnerability was in Nomic's custom transfer feature. A total of 39.839746 nBTC issued through the attack was counted as collateral for allBTC, with a shortfall of approximately 39.84 BTC. On September 7, Osmosis froze 22.650608 allBTC that remained in the attacker's address through an emergency upgrade. The attacker moved the remaining approximately 18 BTC out of Osmosis and converted it to Ethereum. Osmosis has proposed a plan for the recovery of frozen assets and the injection of Bitcoin into the community pool, with the final recovery scale and the timing for the resumption of allBTC functionality to be determined through governance approval processes.

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