Osmosis froze 22.65 BTC after discovering a flaw in Nomic’s custom forwarding system that enabled a double-spend, leaving the allBTC synthetic Bitcoin asset only partially backed by real Bitcoin reserves. The bug let attackers mint invalid nBTC vouchers, which came to represent 36.03% of allBTC’s collateral, according to the project’s dashboard. Minting and redemption for allBTC have been paused to contain the damage. Governance must now decide how to handle the frozen funds and whether to contribute roughly 17.19 BTC from the community pool, while affected holders face uncertainty over if, when, and how full redemption parity returns.
This update represents a notable development in the Crypto sector. Organizations and founders tracking this space should evaluate potential strategic and technical implications on their operations.