Cosmos Hub Neutron governance exploit

The Cosmos Hub network resumed normal operations and block production following a voluntary temporary halt by validators. The suspension was a response to a governance exploit on the Neutron network, which allowed an attacker to gain administrative control over certain contracts and move approximately 1.22 million ATOM.

Cosmos Hub officials clarified that the Hub itself was not vulnerable to the exploit, as the issue was limited to assets moved from Neutron. To secure the funds, validators transferred roughly 1.22 million ATOM from the attacker’s wallet to a new address protected by a 4-of-6 multi-signature structure involving six validators.

Following the incident, a community proposal known as Proposal 1056, or ‘ATOM Refund & Justice Bounty,’ was introduced. This proposal sought to distribute 1.72 million ATOM from the community pool, consisting of the 1.22 million ATOM linked to the attack and a 500,000 ATOM ‘justice bounty’ for supporters. However, the proposal has faced overwhelming opposition. As of late September, approximately 95% of voters selected the ‘No with Veto’ option, and the proposal is expected to fail if the ‘No with Veto’ votes exceed 33.4% of the total, provided voter turnout meets the required threshold.