Summary
- A perpetual trading platform, AFX Trade, experienced a breach resulting in the loss of approximately $24 million, linked to a USDC bridge managed by the protocol.
- The exchange confirmed that the attack was confined to the bridge, with ongoing investigations into the specific method used; on-chain tracking indicates the stolen funds were exchanged for 12,468 ETH.
- In response, AFX has paused the bridge's operations and has publicly offered the hacker a deal—return 70% of the stolen funds and retain the remaining 30% as a "white hat bounty."
On Wednesday, AFX Trade, a decentralized perpetual exchange on Arbitrum that operates using the stablecoin USDC, was compromised, losing $24.15 million due to an exploit targeting its operational bridge, according to security firm Blockaid.
In a tweet, AFX noted that the precise method of the attack is still being examined. Tracking of the funds shows that the hacker converted the stolen USDC to Ethereum and exchanged it for 12,468 ETH, which is now stored in a single wallet, as reported by PeckShield.
We are aware of an incident involving the USDC custody bridge operated by AFX on Arbitrum. Immediately upon detection, we suspended bridge operations and began our incident response protocols. Our engineering and security teams are diligently investigating the cause…
— AFX Trade (@AFX_XYZ) July 23, 2026
In a swift response, Arbitrum's co-founder Steven Goldfeder clarified that the native bridge of the network was not compromised and that the transaction originated from an external protocol. An exploit of Arbitrum's own bridge would have broader implications, while the failure of an app built on it is a contained incident.
AFX has halted operations on the bridge and confirmed that the incident appears to be "isolated to the AFX-operated custody bridge," asserting that neither its trading systems nor the Arbitrum network itself were affected.
The exchange is collaborating with partners and security experts to track the misappropriated funds. Shortly after, Ken C, AFX's head of growth, extended an offer to the hacker: return 70% of the stolen assets and keep 30% as a "white hat bounty." Such public appeals have become common in the crypto sector, similar to Solana's Drift Protocol which made a similar offer following its $285 million breach in April.
This theft is part of a troubling trend for DeFi, which has suffered losses exceeding $840 million due to hacks in 2026. This incident is particularly relevant as another Arbitrum perpetual trading platform, Ostium, lost $18 million just a week prior due to a compromised oracle key.