AFX Trade reported an incident involving its USDC custody bridge on the Arbitrum network. Upon discovering the issue, the team immediately suspended operations and launched an investigation with external security experts.

AFX is aware of an incident involving the AFX-operated USDC custody bridge on Arbitrum.
Upon detecting the incident, we immediately suspended bridge operations and initiated our incident response procedures. Our engineering and security teams are actively investigating the root…

— AFX Trade (@AFX_XYZ) July 23, 2026

"The AFX trading infrastructure, mainnet, and the Arbitrum network itself were not affected. The investigation into the exact attack vector is ongoing. We are collaborating with ecosystem partners, security firms, and relevant parties to track the stolen assets and assess the full extent of the impact," the post stated.

The company emphasized its focus on user protection and asset recovery.

In a follow-up message, AFX representatives clarified that analysts from SlowMist are involved in tracking the withdrawn funds. As of the last update, the assets remained in the attacker's address.

We are continuing to work closely with leading blockchain security partners as the investigation progresses. According to SlowMist, the stolen funds remain in the attacker's address and have been reported to the Crypto Defense Alliance (CDA), a collaborative network that includes…

— AFX Trade (@AFX_XYZ) July 23, 2026

Wallet information has been shared with the Crypto Defense Alliance (CDA), a coalition of exchanges and other industry participants for coordinated incident response. The investigation also involves Zellic, which previously audited the bridge's code.

Blockaid Highlights Validator Signatures

AFX operates as a standalone Layer 1 network for trading perpetual futures. Users deposit funds through Arbitrum, utilizing a separate bridge for this purpose. Before the incident, over $24 million in USDC was held in the contract, according to DefiLlama.

Source: DefiLlama.

Blockaid detected a suspicious transaction on July 22 at 21:30 UTC. A total of 24,150,000 USDC was drained from the AFX bridge and subsequently transferred from Arbitrum to Ethereum. On-chain analysts reported that the funds were exchanged for approximately 12,467 ETH at an average price of around $1937.

According to CoinDesk, the smart contract logic was not bypassed. The withdrawal was approved by five validator signatures with hot keys, sufficient to meet the bridge's quorum of about two-thirds. After a 200-second dispute period, the contract deemed the request valid and released the funds.

Co-founder of Offchain Labs, Steven Goldfeder, stated that the operation originated from a third-party protocol. He confirmed that the native Arbitrum bridge was neither hacked nor exploited.

We're aware of a report of a bridge hack on Arbitrum and are investigating. We can confirm that the transaction in question originated from a third-party protocol, and the Arbitrum native bridge has not been hacked or exploited in any way.

We will coordinate with the third…

— Steven Goldfeder (@sgoldfed) July 22, 2026

AFX has not yet confirmed this mechanism and continues to investigate the attack vector.

In a separate message, AFX's growth lead, known as Supercube, proposed a settlement to the party responsible for the incident, offering to return 70% of the assets and keep 30% as a white hat bounty.

We are extending a white hat settlement offer to the party responsible for the recent bridge incident.

Return 70% of the stolen assets to the following address:
0x222Bd8dbc0d71972f880DAb5D69cdCFD903D9f1B

You may retain the remaining 30% as a white hat bounty.

Our priority is…

— Ken / Supercube🧊 (@supercubeguy) July 23, 2026

"Our priority is to recover user assets and resolve the situation quickly for the community. We urge you to act in good faith. This offer is valid for a limited time," he emphasized.

As of this writing, AFX has not provided a timeline for resuming bridge operations or a compensation plan for users.

It is worth noting that in the second quarter of 2026, the crypto industry set a record for the number of attacks, with analysts recording 83 incidents resulting in a total loss of $755.3 million.