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Rizwan Ansari
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Sohrab KhawasSohrab is a passionate cryptocurrency news writer with over five years of experience covering the industry. He keeps a keen interest in blockchain technology and its potential to revolutionize finance. Whether he's trading or writing, Sohrab always keeps his finger on the pulse of the crypto world, using his expertise to deliver informative and engaging articles that educate and inspire. When he's not analyzing the markets, Sohrab indulges in his hobbies of graphic design, minimal design or listening to his favorite hip-hop tunes.
- Dec 30, 2025 12:46 UTC
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Unleash Protocol Hack Drains $3.9M After Multisig Exploit, PeckShield Reveals
PeckShieldAlert flags $3.9M exploit hitting Unleash Protocol through compromised multisig governance controls.
Stolen funds bridged to Ethereum, with 1,337.1 ETH deposited into Tornado Cash mixer protocol.
Unleash Protocol paused operations, launched forensic probe, and confirmed Story Protocol infrastructure unaffected fully.
Blockchain security firm PeckShieldAlert reported a major hack involving Unleash Protocol, a decentralized platform built on Story Protocol, where an attacker drained around $3.9 million in user funds.
Here’s how the hack happened. PeckShieldAlert report revealed.
How the Unleash Protocol Hack Happened?
According to PeckShieldAlert, the attacker targeted Unleash Protocol’s multi-signature governance system.
By doing so, the attacker gained unauthorized admin access and pushed through a contract upgrade that had not been approved by the core team. This change opened the door for funds to be withdrawn directly from the protocol.
After withdrawing the funds, the attacker bridged the assets to Ethereum and began breaking them into smaller chunks.
On-chain data shows 1,337.1 ETH was deposited into Tornado Cash, a privacy tool often used to hide transaction trails.
The repeated deposits, from small amounts to batches of 100 ETH, seem designed to hide the source of the stolen funds.
What Assets Were Affected in the Breach
In its official incident notice, Unleash Protocol confirmed that several assets were impacted during the exploit. These include WIP, USDC, WETH, stIP, and vIP. The team stressed that the withdrawals happened outside normal governance rules and were not approved internally.
Importantly, Unleash clarified that there is no evidence of any compromise to Story Protocol, its validators, or its core infrastructure. The issue appears limited strictly to Unleash-specific contracts and admin controls.
Unleash Protocol Immediate Response
Following the discovery, Unleash Protocol immediately paused all operations to prevent further damage. The team is now working with independent security experts and forensic investigators to identify the root cause.
Users have been advised to avoid interacting with Unleash Protocol contracts until further updates are shared through official channels.
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FAQs
The hack happened after an attacker gained unauthorized admin control via the multi-signature system and pushed an unapproved contract upgrade.
Roughly $3.9 million in user funds was drained, including ETH and multiple tokenized assets held within Unleash Protocol contracts.
The breach affected WIP, USDC, WETH, stIP, and vIP, all withdrawn outside approved governance and without internal authorization.
Users should avoid interacting with Unleash contracts until official updates are released, as the team continues forensic and security reviews.
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