Interoperability protocol Axelar has temporarily deactivated its bridge connections to Secret Network following a security breach that led to the theft of approximately $4.7 million in bridged digital assets. The exploit was identified on assets that had been transferred from the Axelar chain to Secret Network utilizing the Cosmos Inter-Blockchain Communication framework.
Preliminary investigations indicate that the vulnerability resides in the Secret-side ICS-20 smart contract responsible for processing IBC transfers between the two blockchains, rather than in Axelar’s core protocol. Axelar’s emergency response team acted swiftly to disable both the Secret and Secret-SNIP connections to halt any further asset loss. The company has also alerted relevant cryptocurrency exchanges and law enforcement agencies as the probe continues.
Secret Network is known for its privacy-centric blockchain that encrypts transaction data while keeping smart contract code verifiable on-chain. Its integration with Axelar enabled developers to build confidential cross-chain applications, such as private decentralized finance activities, anonymous NFT trades, and hidden governance functions.
Axelar has stated that the incident appears isolated to assets bridged from Axelar to Secret Network, with no evidence suggesting that other IBC connections, native Secret Network tokens, or additional Axelar integrations were compromised. The core Axelar protocol remained fully operational throughout the event. A detailed post-mortem report is expected once the investigation concludes, and the affected bridge routes will remain offline until engineers complete their review of the attack vector and loss assessment.
This breach adds to a series of security incidents affecting crypto infrastructure projects in recent weeks. Just earlier this month, Humanity Protocol announced recovery measures after a June 8 exploit forced the project to retire its original H token across Ethereum, BNB Chain, and Humanity Mainnet. The project attributed the incident to stolen credentials, not vulnerabilities in its token contracts or bridge infrastructure.
Security failures have also led to project shutdowns; for instance, crypto payments platform Pyra announced plans to cease operations after determining it could not recover from the financial and user impact of the Drift exploit. According to Binance Research, DeFi exploits in April alone contributed to roughly $13 billion in total value locked outflows across decentralized finance protocols, reducing available liquidity. The research also noted that the on-chain leverage ratio climbed to around 38%, a level last seen in 2021, as TVL declined faster than borrowing activity.