Saga blockchain suffers a $7 million hack, leading to stablecoin collapses and a 5.2% drop in SAGA token value.
Saga, a layer-one blockchain, has temporarily halted its EVM network after hackers made off with $7 million in USDC. The breach was confirmed after the SagaEVM was paused at block height 6593800.
Saga is actively working on rectifying the situation and will release more information as it becomes available.
— Saga ⛋ (@Sagaxyz__) January 21, 2026
The attackers executed a series of strategic actions, utilizing smart contracts and cross-chain operations to transfer the stolen funds into Ethereum. Saga's team has pinpointed the hacker's wallet.
Impact on Stablecoins
This incident caused significant instability in two of Saga's stablecoins, Colt and Mustang, which both lost their dollar peg. Additionally, another stablecoin, D, fell to $0.70 from its dollar value.
In light of the hack, the SAGA token also experienced a decline, dropping 5.2% to $0.05. Despite the incident, the broader Saga SSC network remains secure, with its consensus mechanism and validators unaffected.
The Saga team is collaborating with exchanges and bridge operators to attempt to recover the stolen assets. Operations for SagaEVM will resume once the investigation concludes.
Potential Vulnerability
Cybersecurity experts suggest the exploit may have stemmed from vulnerabilities within the Saga Dollar smart contract, allowing for the creation of D tokens without collateral. A blockchain analyst speculated that a compromised private key could have facilitated the breach.
Additionally, this incident follows a recent hack affecting Makina Finance, which lost approximately $5 million from one of its stablecoin pools. In 2025, losses from hacks totaled around $3.4 billion, a substantial increase from previous years, with major incidents accounting for a significant portion of the losses.
Mitchell Amador, CEO of Immunefi, noted that nearly 80% of cryptocurrency projects fail following significant attacks.
