Haven Protocol Exploits: Mitigation Plan and Next Steps

  1. June 22nd: 203,000 xUSD and 13.5 xBTC was minted in two exploits. We originally thought we had prevented these being spent but we now know the attempted mitigation was too late. We did however prevent this attack from reoccurring.
  2. June 24th: An exploit in the xAsset conversion validation meant that an unknown amount of XHV was minted. We also prevented this from reoccurring. A summary of what our investigation has uncovered can be found below.
  3. June 29th: an exploit was leveraged that allowed for minting of 9m xUSD.
  1. Halting deposits and withdrawals of XHV and xUSD on partner exchanges.
  2. Pausing the xAssets conversion mechanism in the Haven Vault.
  3. Expediting fixes and patches to close gaps in the current codebase.
  4. Working closely with centralized exchanges to identify suspicious accounts, freeze relevant assets, and trace any withdrawals.
  5. Investigating and tracing the attacker’s illicit withdrawals of BTC and ETH from CEXes with the help of a leading blockchain investigator.
  6. Contacting law enforcement such as NSCS and NFIB to ensure the attacker’s remaining exchange assets are frozen.
  7. Assessing and finalizing plans for a chain reorganization to “roll back” certain effects of these attacks.
  • Initiating a blockchain rollback which will remove all transactions from a certain point onward, including all known malicious transactions. We will present the options for the exact block to rollback to the community to decide.
  • Implementing a hard fork which will patch and solve all known minting exploits of Haven Protocol.
  • All new protocol code will be made publicly available for review and testing before release to mainnet. Additional technical documentation of the exploits and solutions we’ve developed will be made available for public review.
  • With the help of our friends at Cake Wallet, we are contacting Monero’s code auditors and are engaging them on all future material code implementations.
  • Allocate a substantial portion of the Haven treasury for burning to mitigate the impact of token inflation caused by the unintended minting exploit. Should the community decide this action is necessary, we will post public view keys for these transactions.
  • We will be reopening Haven vaults on a to be determined date, with advance notice to the community. We will request exchanges reopen deposits and withdrawals, and enable vault conversions, after successful rollback of the chain and deployment of the hard fork.
  • Implement an oracle “cool off period” for conversions, after fork, and after exchanges are reopened. This will mitigate some of the impact of the exploit-driven reduced MA, while also not penalizing those who did offshore at lower prices. We expect to re-enable conversions after this cooling off period and when exchange wallets have reopened.
  • We are initiating two separate bounties: Up to 200,000 xUSD for information leading to the recovery of exploited gains. These funds will be paid on a pro-rated basis for every dollar recovered. Up to 100,000 xUSD in bounties across a series of tasks to further test our protocol code and conversions.
  • Hiring up to 4 additional blockchain developers with experience in Monero’s codebase. We are offering 20,000 xUSD bounties for introductions to any developers who ultimately accept a full time offer with Haven and stay committed for at least three months.
  • Approximately 2.1M XHV were sent to centralized exchanges such as Kucoin and Tradeogre.
  • A significant proportion of the 2.1M XHV have been frozen by those exchanges and we are working with the exchanges to ensure that these funds are permanently out of the attackers control. The total number of tokens sold to the XHV community was approximately 1.1M of which we believe the attackers were able to cash out 2,048 ETH in profits.
  • A substantial amount of BTC, ETH and USDT is frozen in the exchange wallets of these exchange users though we cannot report an exact number while we wait on law enforcement. We are still in the early stages of working with these exchanges to determine a path forward for these assets — whether that is to remain frozen, distributed to the community, or a yet unknown option. We do not expect this to be an immediate process.
  • We believe the attackers withdrew their malicious ETH and BTC to public addresses. In most cases, they subsequently moved those ETH holdings through Tornado Cash, while the BTC holdings have not yet moved from the target withdrawal wallet.



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Haven Protocol

Haven Protocol

Ecosystem of private stable assets. Based on Monero. The world's first private stablecoin xUSD is now live.