One of crypto’s latest security failures has left the Truebit protocol reeling after a massive exploit drained over $26 million in Ether and sent its TRU token into a near-total collapse.
Quick Summary – TLDR:
- A smart contract vulnerability allowed hackers to steal over 8,500 ETH from Truebit, valued at $26 million.
- The TRU token plunged by more than 99 percent, falling from around $0.16 to near-zero.
- The flaw reportedly existed for nearly five years and let attackers mint free tokens using a pricing logic bug.
- The incident reflects a troubling trend of persistent DeFi vulnerabilities amid declining overall crypto hack losses.
What Happened?
On January 7, a critical flaw in one of Truebit’s Ethereum smart contracts was exploited to drain over $26 million in ETH, marking one of the first major crypto hacks of 2026. The attacker used a vulnerability in the “Purchase” contract that let them mint tokens essentially for free, which were then resold into Truebit’s own protocol to extract funds. The TRU token’s value instantly collapsed by 99 percent in the hours following the attack.
Truebit just got drained for 8,535 $ETH.
— niku (@DefiNiku) January 9, 2026
And this one wasn’t “bad price action” or “whales dumping” – it was a straight smart contract failure that let someone print $TRU for free and arb it into real $ETH.
Here’s the core mechanic (and why it’s so nasty):
The attacker hit an… pic.twitter.com/miqYAhpyZq
Vulnerability in Smart Contract Allowed Free Token Mints
The exploited contract had been live on Ethereum for nearly five years and was tied to TRU token purchases. According to security researchers, a pricing logic flaw in the function getPurchasePrice[uint256] allowed attackers to request large mint quantities that returned a zero purchase price.
This enabled them to:
- Mint tokens at no cost.
- Sell them back into the bonding curve.
- Repeatedly drain ETH reserves through a buy-sell loop.
One particularly bold transaction even used a function named “Attack,” signaling that the breach was not just opportunistic but deliberate and well-planned.
Truebit Confirms Incident, Collaborates With Law Enforcement
The Truebit team confirmed the incident shortly after it was flagged by on-chain analysts. In a statement on X, they acknowledged “an incident of security involving one or more malicious actors” and urged users not to interact with the affected contract. The protocol is now working with law enforcement and promised future updates via official channels, though no timeline for a fix or recovery plan has been shared.
Stolen ETH Funneled Through Tornado Cash
Blockchain data shows that a portion of the stolen ETH was quickly funneled through Tornado Cash, a known privacy mixer. This tactic, common in large crypto thefts, makes the stolen funds harder to trace and recover, and is seen as further evidence that the exploit was strategically orchestrated.
Market Reaction: TRU Token Collapse
The market response was swift and devastating. According to Nansen, TRU’s price nosedived from around $0.16 to below $0.000000003, an almost complete wipeout in value. Even before a full technical post-mortem could be published, investor confidence had evaporated.
Security experts pointed to a lack of public audits. “No official audits are published in their docs, yet their slogan is ‘Don’t just trust, verify’,” commented Dimitar Dimitrov, co-founder of CD Security.
A Broader Trend in Crypto Exploits
Despite this massive attack, December 2025 saw a decline in total crypto exploit losses, according to data from PeckShield. The firm reported $76 million in total losses, down from $194 million in November. However, high-profile breaches continued to plague the space, including:
- A $3.9 million counterfeit token incident on the Flow network.
- A $7 million compromise of the Trust Wallet Chrome extension, caused by malicious code in version 2.68.
Chainalysis data revealed that illicit crypto transactions surged to $154 billion in 2025, driven by smart contract weaknesses and sanctioned entities.
SQ Magazine Takeaway
Honestly, it’s frustrating to see these kinds of exploits still happening in 2026. A five-year-old vulnerability? That’s unacceptable. Truebit’s failure to audit such critical contracts is a harsh reminder that in DeFi, trust is earned through transparency and diligence, not slogans. As a crypto user, this is a wake-up call to double-check where you’re putting your money. Just because something is on-chain doesn’t make it secure. I hope this serves as a turning point for better security culture across the industry.
