HORIZON BRIDGE

DESCRIPTION OF EVENTS

"The Horizon bridge is a cross-chain feature developed by Harmony to facilitate the transfer of assets between Harmony’s network and other blockchains such as Ethereum, Binance Chain and Bitcoin. The bridge aims to provide users with the benefits of both the layer-1 network’s security and the layer-2 network’s efficiency."

"The Bridge is used to migrate assets from one chain to another. If you have assets on Ethereum or Binance Smart Chain, you can use the bridge to move them to Harmony blockchain and get corresponding assets on Harmony. LayerZero also allows redemption of the exchanged assets back at any time."

"By dividing its blockchain into four parallel networks called shards, Harmony reduces latency and improves overall efficiency. The Horizon bridge is an essential component of this innovative solution, enabling users to move assets across chains without compromising security or decentralization."

"On Thursday, June 23, 2022, the Harmony Protocol team was notified of a malicious attack on our proprietary Horizon Ethereum Bridge. At 5:30 AM PST, multiple transactions occurred that compromised the bridge with 11 transactions that extracted tokens stored in the bridge. The estimated value at the time of the attack was approximately $100 million USD."

"A recent DeFi attack that happened in June 2022 involves a young startup Harmony, the owners of a Horizon bridge that enabled frictionless asset transfers from the Ethereum network to BSC. An attack at Horizon was similar to the earlier hacks of the Ronin Network bridge and Wormhole. The details of the hack are still unknown, but the problem seems to relate to the “private key compromise,” as the bridge’s owners reported no critical errors in the smart contract code. Experts point out the weakness of the “multisig” wallet that uses only two signatures to enable the transaction."

"In late June, attackers linked to North Korean hacker group Lazarus exploited a vulnerability in Harmony's Horizon Bridge to steal over $100 million." "Horizon Bridge $100M hack."

"On the day of the exploit, the attackers compromised two of the five multi-signature (multisig) addresses securing the bridge. The multisig wallet required just two signatures to initiate transactions, which potentially made it more vulnerable to attacks. The exact attack vector remains unknown, although some speculate that the private keys of the compromised addresses were stored as plaintext in hot wallets.

According to Harmony’s incident response team, the private keys had been stored and encrypted by Harmony, using both a passphrase and a key management service for double encryption. Additionally, no single machine had access to multiple unencrypted keys. However, the attacker managed to access and decrypt several of these keys, allowing them to gain access to the servers running these hot wallets to control the necessary addresses to pass any desired transactions."

"It’s been just a few months since the massive Ronin Network bridge hack triggered by multiple private key thefts. The Horizon Bridge hack follows a similar pattern where two private keys were compromised and used to steal $100M worth of tokens. While the investigation is ongoing the target, attack vectors, and subsequent laundering smell a lot like North Korea. The sad part was that the Horizon’s threat model clearly failed when it assumed that 2 keys could never be compromised at the same time."

"The hackers stole a total of about US$103.7 million worth of Ethereum and multiple tokens in 12 transactions. The scale of this theft highlights the potential risks associated with securing digital assets on blockchain platforms and serves as a reminder of the importance of robust security measures."

"The attackers first consolidated the stolen funds into a primary consolidation address (0x0d0431..ded00). They then split the ERC-20 tokens and sent them to 2 new addresses, which converted these amounts to Ethereum. The attackers then sent 72,770.4 Ethereum back to the Exploiter’s main address from these 2 new addresses.

Next, the attackers sent the Ethereum to 5 new addresses in 5 transactions between June 27 and July 1, 2022. The summary of these transactions is as follows."

A notice has been added disclaiming liability.

"The LayerZero-Harmony Bridge Interface (“Interface”) is an interface that facilitates use of a third-party cross-chain communication system (“Bridge”) that is designed to enable users to send messages between certain blockchains to enable the exchange of crypto assets between such blockchains. Your use of the Interface and the Bridge is entirely at your own risk.

The Interface and the Bridge are available on an “as is” basis without warranties of any kind, either express or implied, including, but not limited to, warranties of merchantability, title, fitness for a particular purpose and non-infringement.

You assume all risks associated with using the Interface and the Bridge, and digital assets and decentralized systems generally, including but not limited to, that: (a) digital assets are highly volatile; (b) using digital assets is inherently risky due to both features of such assets and the potential unauthorized acts of third parties; (c) you may not have ready access to assets; and (d) you may lose some or all of your tokens or other assets. You agree that you will have no recourse against anyone else for any losses due to the use of the Interface or the Bridge. For example, these losses may arise from or relate to: (i) incorrect information; (ii) software or network failures; (iii) corrupted cryptocurrency wallet files; (iv) unauthorized access; (v) errors, mistakes, or inaccuracies; or (vi) third-party activities.

The Interface and the Bridge do not collect any personal data, and your interaction with the Interface and the Bridge will solely be through your public digital wallet address. Any personal or other data that you may make available in connection with the Bridge may not be private or secure."

Explore This Case Further On Our Wiki

The Horizon bridge is a cross-chain feature developed by Harmony to enable the transfer of assets between Harmony's network and other blockchains such as Ethereum, Binance Chain, and Bitcoin. Users can migrate assets from Ethereum or Binance Smart Chain to Harmony using the bridge, and the redeemed assets can be exchanged back at any time. In June 2022, the Horizon Ethereum Bridge suffered a malicious attack, resulting in the compromise of 11 transactions and the theft of approximately $100 million. The attack exposed vulnerabilities in the bridge's multisig wallet security, allowing the attackers to access and decrypt private keys. The incident highlights the ongoing challenges in securing cross-chain bridges and the need for robust security measures in the blockchain industry.

US Officials Tie North Korea’s ‘Lazarus’ Hackers to $625M Crypto Theft (Jan 9)
@blockthreat Twitter (Mar 23)
Top 17 Smart Contract Hacks in 2021-2022 Found by 4IRE | 4IRE (Sep 12)
Harmony ONE-ETH Bridge (Nov 16)
Bridge tutorial - Harmony (Nov 16)
FAQ - Harmony (Nov 16)
Harmony’s Horizon Bridge Exploit: A Crypto Money Laundering Case Study - Blockchain Intelligence Group (Nov 16)
Hack Track: Analysis of the Analysis of Harmony's Horizon Bridge Exploit | Hack Track | Merkle Science  (Nov 16)
Harmony Ropes in FBI After Losing $100M in Exploit; ONE Token Slumps (Nov 16)
Harmonys Horizon Bridge Hack (Nov 16)
https://etherscan.io/idm?addresses=0xd6ddd996b2d5b7db22306654fd548ba2a58693ac,0x0d043128146654c7683fbf30ac98d7b2285ded00&type=1 (Nov 16)
Ethereum Transactions Information | Etherscan  (Nov 16)
@harmonyprotocol Twitter (Nov 16)
Ethereum Transaction Hash (Txhash) Details | Etherscan  (Nov 16)

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