On February 21, 2026, Eastern Eight Time, the IoTeX cross-chain bridge was attacked due to private key leakage, with assets in the vault being transferred and exchanged for ETH in a short period, and some funds were subsequently transferred across chains to the Bitcoin network. The security agency PeckShield quickly provided a preliminary estimate of approximately 8 million dollars in losses, while the official IoTeX statement emphasized that "the current situation is under control" and claimed that the actual losses were significantly lower than market rumors. Simultaneously, Bithumb and Upbit suspended IOTX deposit and withdrawal services, tightening secondary market sentiment and rapidly fueling doubts over whether the "project had suffered severe damage." This incident brought a larger question to the forefront: Was this merely an isolated incident, or a resurgence of the longstanding issue of cross-chain bridge security in a new cycle?
Chain Reaction of Private Key Breach
● The public consensus on the attack process indicates a typical private key breach type cross-chain bridge incident. According to information released by PeckShieldAlert, the attacker possessed the private key related to the IoTeX cross-chain bridge, allowing them to directly operate the vault address and transfer the entrusted assets out of the bridge’s vault account, quickly exchanging them on-chain for ETH. This model bypassed regular business logic and permission restrictions; once the private key is compromised, the entire vault is essentially "legally authorized" to be accessed, making it difficult to block through contract-layer mechanisms in a short time.
● Public information indicates that some of the liquidated assets were further transferred across chains to the Bitcoin network, but the specific cross-chain tools, transfer paths, and intermediary addresses have not been consistently disclosed by the official or multiple parties. Currently, it can only be confirmed that funds exhibited a migration trend from IoTeX related addresses to Ethereum, then extending to the Bitcoin ecosystem; the complete path, intermediary accounts, and final aggregation locations remain to be verified, which directly restricts external judgment on the asset recovery potential.
● In this incident, PeckShieldAlert was the first to issue an alert stating "the IoTeX.io cross-chain bridge was attacked due to private key leakage" and provided a preliminary estimate of the loss scale. As one of the earliest whistleblowers in multiple DeFi and cross-chain security incidents, PeckShield has accumulated a voice in the industry with "early warning + rough loss estimation," and its tweets often serve as the starting point for risk repricing in the secondary market. This situation was no different: before the official voice emerged, investors had already anchored their expectations around a "loss of 8 million" based on its estimates.
● From an industry perspective, private key management errors appear frequently in the history of cross-chain bridge attacks. Whether due to negligence in earlier multi-signature threshold configurations, lack of standard procedures for internal key circulation among operational teams, or signature servers being compromised, the scenario often presented on-chain is a similar picture of "the vault address suddenly becoming friendly to attackers." The IoTeX incident is not an exception; rather, it reminds the market again: on a cross-chain bridge, which serves as infrastructure for carrying large assets, any single point failure regarding private keys will directly evolve into systemic risk.
Narrative Hedging Amidst 8 Million Loss Dispute
● As soon as the incident was exposed, PeckShield provided an estimate of approximately 8 million dollars in losses based on on-chain circulation data. This figure is currently still a single third-party source and serves as a typical early-stage rough pricing tool following the incident, rather than "final data" validated through the project party or multiple agencies. Research briefs also indicate that this loss scale remains within a range yet to be further verified; the specific composition of stolen assets and real-time market value fluctuations could cause the final number to differ from the initial estimate.
● In contrast, the IoTeX official emphasized in a statement that "the current situation is under control" and stated that the actual losses are "significantly lower than market rumors". This suggests that the project party acknowledges the incident and asset damage on one hand, while attempting to set a psychological boundary in terms of information release to prevent market sentiment from spiraling out of control. The official did not provide an exact amount, but through the expression of "significantly lower than the rumors," it forms a flexible hedge against the widely circulated "8 million" figure, allowing the project party to retain space for future corrections and disclosures of details.
● Behind the crisis narrative lies each party's own structural motives and biases. The project party tends to downplay losses and control panic diffusion in public relations to alleviate selling pressure, prevent ecological partners from wavering, and even retain negotiation leverage for subsequent repairs and financing; on the other hand, security companies often amplify the potential losses and risk spillover, reinforcing their presence and necessity in security incidents. The former may understate the long-term costs of trust erosion, while the latter might adopt a conservative upper limit in their loss estimation, thereby amplifying short-term panic and information noise.
● In the phase where the exact loss amount and fund paths remain unclear, the market is forced to price risk between two sets of narratives: one with a high-pressure story of "8 million losses, private key breach, vault being emptied," and the other with a reassurance of "controllable situation, limited losses". The price reflects, ultimately, the investor's trust discount in the project party's transparency, the trust premium in the professionalism of third-party institutions, and the fear-driven conservative bias in an environment of information asymmetry— even without solid evidence, funds will usually prioritize reserving discount space for the worst-case scenario.
The Security Gap from Cross-Chain Bridges to CeFi
● If we place the IoTeX incident on a longer timeline, it appears not as a “black swan,” but rather another node in the normalization trajectory of recurring attacks on cross-chain bridges. Since the rise of multi-chain ecosystems, the demand for asset interoperability between different public chains has propelled rapid expansion of cross-chain bridges, but under the realities of regulatory ambiguity, inconsistent auditing standards, and highly customized operational processes, bridges have become "high-cost-performance" targets for attackers. The leakage of IoTeX's private key is merely a re-emergence of a common industry problem in a new project and cycle, rather than an isolated case after a mature security system.
● In stark contrast, traditional financial institutions are massively going on-chain with higher compliance requirements. Research briefs indicate that Japan's SBI Holdings issued on-chain bonds worth approximately 10 billion yen (about 64.5 million dollars) during the same period, and in the U.S. market, Coinbase holds over 80% of BTC and ETH ETF-related assets. These cases demonstrate that when traditional finance and institutional capital enter the on-chain space, they tend to prefer infrastructures that have strict custody systems, audit processes, and compliance frameworks, rather than complex risk exposures and ambiguous boundaries of responsibility in cross-chain bridge systems.
● On one side, traditional finance is testing "large-scale capital on-chain," enhancing security through high specialization and centralization at the custody level; on the other side, public chain projects repeatedly hit snags on cross-chain bridges, with private key management, human errors and design flaws continually triggering issues. The security maturity gap between the two is reflected not only in technology stacks and risk control processes, but also in understanding the different perceptions of "failure costs": the institutional world cannot afford frequent "trial and error," whereas the native crypto world passively evolves through repeated accidents.
● This forms an unavoidable core contradiction in the current industry: capital is massively moving on-chain, but the security maturity of custody and cross-chain infrastructure is highly uneven. Events like that of IoTeX will make more institutions conservative when evaluating multi-chain layouts and cross-chain asset allocations, and will elevate the demand for "more centralized custody, stricter audit standards, and clearer responsibility chains," further amplifying the differentiation in infrastructure security between CeFi and DeFi.
Control and Uncontrollability in Crisis Management
● When IoTeX states that "the situation is under control," the outside world usually expects the project party to take a series of industry-standard crisis response actions: for instance, suspending or limiting certain functionalities of the involved cross-chain bridge, freezing relevant permissions within controllable contracts, cooperating with security companies to complete incident tracing and risk assessment, and assessing whether protocol upgrades, asset snapshots, and subsequent compensation schemes are necessary to restore ecological trust. These actions have not yet been fully detailed but have formed a certain common template in similar incidents; IoTeX’s options will largely be constrained by this template.
● Compared to on-chain handling, Bithumb and Upbit swiftly suspended IOTX deposits and withdrawals, representing the first-line risk control response from the CeFi side. For the secondary market, the interruption of deposits and withdrawals on one hand cuts off the potential channels for "black money" to flow into exchanges, mitigating compliance and money laundering risks; on the other hand, it also compresses IOTX’s liquidity in the short term. Holders find it difficult to hedge risks via cross-exchange arbitrage or on-chain portfolio adjustments without deposit or withdrawal avenues, which amplifies price volatility and creates a dual amplification effect on both panic selling and off-market discounts.
● In the period of vacuum where the loss amount, fund paths, and subsequent recovery schemes remain unclear, ordinary users and secondary traders' risk management can only rely on "information sensitivity + position discipline." Some investors may choose to immediately reduce their exposure, compressing IOTX and associated assets within their acceptable risk boundaries; others, based on judgments about the project’s long-term value and handling capability, may choose to wait and even buy more at lower prices. However, these decisions essentially bet on undisclosed on-chain facts, carrying the risk of incomplete information in pricing.
● In such events, on-chain traceability and cross-chain complexity create a subtle tension. On one hand, the public ledger allows anyone to track parts of the fund flow, providing possibilities for freezing assets, blacklisting addresses, and community collaborative pressure; on the other hand, once assets have diffused through multi-layer cross-chain and mixing tools, the cooperative threshold across ecosystems and the fragmented realities of judicial jurisdiction will quickly undermine the effectiveness of asset recovery. The fact that part of the funds from IoTeX flowed to the Bitcoin network indicates that the recovery path will face greater constraints on both technical and legal fronts.
Which Bridge Will Sound the Alarm Next
The IoTeX cross-chain bridge incident ultimately highlights two longstanding issues: first, private key management remains the most vulnerable single point in the entire multi-chain ecosystem; second, the accumulation of risks in the design and governance of cross-chain bridges has not been treated with sufficiently stringent standards by the industry. Regardless of where the final damage figures settle, this incident demonstrates that as long as private keys remain concentrated in the hands of a few individuals or nodes, and as long as cross-chain logic is viewed as a "product feature" rather than "critical infrastructure," similar accidents will be difficult to eliminate completely and will continue to occur in rotation across different projects and cycles.
For a considerable period in the future, the narrative of crisis from the project party and the assessment discrepancies from third-party security agencies will continue to be key variables impacting valuation and trust. On one side are reassurances of "the situation is controllable, losses are limited," while on the other side are warnings of "loss caps, potential spillovers"; the uncertainty woven from these two voices will ultimately be transformed by the market into adjustments in the project's long-term discount rate—lack of transparent disclosures, slow responses, and ambiguous statements will all be doubled in valuation during the next risk event.
Against the backdrop of frequent cross-chain bridge accidents, regulatory agencies and institutional funds are likely to continue leaning towards "more centralized custody, stricter compliance infrastructures": entrusting large assets to custodians with licenses, audits, and insurance mechanisms to reduce reliance on self-built bridges, anonymous multi-signatures, and temporary security patches. This does not signify the end of the decentralized vision, but rather indicates to us—on the specific issue of capital security, the market is voting with its feet.
For ordinary users and developers, the mid-to-long-term implication is equally clear: reduce reliance on a single cross-chain bridge, and avoid putting all assets at stake on one private key, one set of multi-signatures, or one bridge; when choosing cross-chain tools and asset custody solutions, prioritize "security architecture, permission design, and transparent disclosures" as essential considerations, rather than after-the-fact corrections. No one can accurately predict which cross-chain bridge will be attacked next, but those who have built sufficient security redundancies for their assets and protocols beforehand are more likely to remain at the table after the incident.
Join our community to discuss and become stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh
OKX Benefit Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefit Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
