Wanchain Cardano Bridge Drained of 515M NIGHT Tokens

Bridge exploit sends Midnight token to record low

Wanchain suspended its Cardano-to-BNB Chain bridge on July 20 after attackers drained approximately 515 million NIGHT tokens from a Cardano-side lock address backing the infrastructure. The exploit sent Midnight’s NIGHT token to an all-time low near $0.015, a decline of more than 30% during the fallout. The stolen assets were valued at an estimated $9 million to $10 million at the time of the sell-off.

BlockSec, a blockchain security firm, conducted preliminary analysis pointing to a possible problem in the TreasuryCheck validator’s signed-message encoding. The flaw could have allowed a previously valid signature to be reused with different transaction data, according to BlockSec’s findings.

The Midnight Foundation stated the breach was confined to third-party bridge infrastructure and did not disrupt Midnight’s protocol, validator network, consensus system, or core infrastructure. The NIGHT smart contract operating on Cardano continued functioning normally.

Midnight coordinated with seven major exchanges to limit movement of stolen assets. Binance, Kraken, KuCoin, Bybit, OKX, Gate, and MEXC froze accounts, blacklisted wallets, and suspended deposits and withdrawals to contain the damage.

Charles Hoskinson, Cardano founder, said ecosystem organizations formed a “war room” to monitor the situation, including Midnight, Input Output, Intersect, and other groups. Hoskinson emphasized the vulnerability of cross-chain infrastructure in a statement about bridges: “Bridges are the most vulnerable of all of these attacks in the cryptocurrency space.”

Hoskinson also offered a medical analogy when discussing the incident. “Being 90% resistant to a deadly disease doesn’t mean you’re immune to a deadly disease. It just means more often than not you’re unlikely to catch it,” he said.

Hoskinson said audits would be required to establish “ground truth” around the failure and responsibility for the breach.

Cardano protocol and ADA price movement

The exploit did not affect the Cardano protocol itself. Three days before this article, Cardano enacted the van Rossem hard fork, moving to protocol version 11. The upgrade expanded Plutus smart-contract functionality and tightened ledger rules. The upgrade was approved through Cardano’s on-chain governance process involving DReps, stake pool operators, and the Constitutional Committee.

ADA climbed 8% during the period surrounding the exploit. Over the past week, ADA gained 11%, trading at $0.175 on Tuesday and reaching approximately $0.177. The token approached but did not breach the $0.20 price threshold.

Santiment, a blockchain analysis firm, noted that the rebound pushed Cardano’s 30-day MVRV ratio back above zero alongside Bitcoin, ETH, and XRP. In June, Cardano’s 30-day MVRV had been negative at 18%.

NIGHT token recovery

NIGHT recovered 30% from its record low as of press time, trading near $0.022 with a 19% 24-hour gain. The recovery followed the coordinated exchange response and ecosystem coordination efforts.

The bridge exploit added to recent security concerns affecting the Cardano ecosystem. In late June, Midnight temporarily suspended Glacier Drop redemptions after a separate security incident affected some Cardano wallets associated with SecondFi. Midnight resumed Glacier Drop redemptions on July 9.

Bridge exploits have extracted substantial value from cross-chain infrastructure historically. Approximately $2 billion in total crypto has been stolen from bridge infrastructures across the sector.