AFX Trade has suspended operations after a significant hack drained $24.15 million in USDC from its custody bridge on Arbitrum.
AFX Trade has suspended its USDC custody bridge operations on the Arbitrum network following a significant security breach that drained approximately $24.15 million in USDC. The company acted swiftly to halt transactions and is conducting an investigation alongside cybersecurity experts.
In a statement, AFX acknowledged the incident and reported that its trading infrastructure and the Arbitrum network remained unaffected. The ongoing investigation aims to determine how the breach occurred and to recover the stolen assets.
The company is collaborating with blockchain security partners, including SlowMist, to trace the withdrawn funds. Reports indicate that the assets are still located in the attacker's wallet. Wallet information has also been shared with the Crypto Defense Alliance (CDA), a network of exchanges coordinating responses to such incidents.
On July 22, a suspicious transaction was flagged, revealing that 24,150,000 USDC had been siphoned from the AFX bridge and transferred from Arbitrum to Ethereum. Analysts found that the funds were converted into approximately 12,467 ETH. AFX confirmed that the withdrawal process adhered to its smart contract logic, and the transaction was authorized by five validator signatures, meeting the required quorum.
Steven Goldfeder, co-founder of Offchain Labs, clarified that the incident was linked to a third-party protocol and not a direct exploit of the Arbitrum bridge itself. AFX is still verifying this information as part of its investigation.
To expedite asset recovery, AFX's growth lead, known as Supercube, proposed a settlement offer to the perpetrators, suggesting that they return 70% of the funds while retaining 30% as a bounty. This approach is aimed at resolving the situation quickly and restoring user confidence.
As of now, AFX has not provided a timeline for restoring bridge operations or outlined how it will compensate affected users. The incident highlights ongoing vulnerabilities in the crypto sector, which saw a record of 83 attacks in the second quarter of 2026, resulting in losses totaling $755.3 million.
