Secret Network bridge exploit mints unbacked Axelar saTokens, $4.67M stolen

| coinpaper.com
Secret Network bridge exploit news: attackers exploited a flaw in an Axelar-wrapped saTokens contract tied to the minting process. On June 10 the bug allowed minting unbacked wrapped assets, and on June 17 it was detected after a failed cross-chain attempt triggered an “insufficient funds” error. According to Common Prefix, the Secret Network bridge exploit succeeded because the contract did not verify the source channel of inbound transfers before minting. The attacker forged deposits, created seemingly collateral-backed saTokens, and then redeemed them through Axelar channels to drain real escrowed funds. Affected tokens included saUSDT, saUSDC, saDAI, saWETH, saWBTC, saWBNB and sawstETH. After the theft, the stolen assets were bridged to Ethereum, converted into ETH, and dispersed across ~30 wallets; some proceeds were later moved to exchanges including KuCoin, ChangeNow and HitBTC. Secret Network warned holders of Axelar-bridged saXXX tokens that backing may be compromised and funds could be lost. It said SCRT (native token) was not affected. Axelar stated neither the Axelar network nor IBC was compromised, and the issue was limited to a third-party token contract. For traders, the Secret Network bridge exploit adds near-term risk pressure on cross-chain wrapped assets and liquidity providers, amid an active month of 20+ reported DeFi exploits (DeFiLlama data).
Bearish
This is a direct hit to trust in Axelar-wrapped saTokens: unbacked tokens were minted via a contract logic flaw, then redeemed to drain escrow. Even though SCRT is reportedly unaffected, the market impact on the affected wrapped assets and on Axelar-related risk perception is negative. In the short term, traders typically price in higher counterparty/bridge risk, widening spreads and depressing liquidity for cross-chain wrapped tokens. In the long term, repeated bridge incidents (20+ exploits this month) can accelerate de-risking from wrapped assets and raise due-diligence standards for LPs, which tends to weigh on sentiment and valuations for the ecosystem tied to the compromised integration.