Cosmos Labs urges EVM chains to halt following security breach

Cosmos Labs has issued an urgent warning regarding an active security incident targeting chains utilizing its Cosmos EVM module. The module provides Cosmos SDK chains with compatibility for the Ethereum Virtual Machine. Due to the nature of the incident, security and engineering teams have advised affected validators to halt network operations to contain the breach.

The current situation follows recent exploits involving the MANTRA Chain and TAC. The vulnerability appears linked to a flaw catalogued as ASA-2026-002, which involves the ICS20 precompile component responsible for cross-chain token transfers. This flaw relates to incorrect state handling during nested EVM execution, potentially allowing attackers to manipulate balance and ownership tracking during complex transactions.

Despite the security concerns within the Cosmos ecosystem, the broader cryptocurrency market has remained relatively stable, with Bitcoin and Ethereum trading higher during the unfolding event.