KAVA drops 41 percent after bridged tokens sold on BSC
Kava Chain said the breach was contained within Kava Lend and was not an infinite mint. South Korean exchanges Upbit, Bithumb, and Coinone suspended deposit and withdrawal services.
Key takeaways
- 1KAVA fell 41 percent after tokens were bridged to BNB Smart Chain and sold.
- 2Kava Chain stated the security breach was contained within Kava Lend and was not an infinite mint.
- 3South Korean platforms Upbit, Bithumb, and Coinone halted KAVA deposits and withdrawals.
The KAVA token fell 41 percent after an unscheduled movement of tokens was transferred across a cross-chain bridge to BNB Smart Chain and liquidated on open markets. The large volume of tokens sold on BNB Smart Chain caused immediate downward price pressure across global spot exchanges.
Kava Chain said in an official statement that the security incident was strictly contained within Kava Lend, a lending application operating on its network, and stressed that the event was not caused by an infinite mint exploit. In response to the market disruption, three major South Korean cryptocurrency exchanges, including Upbit, Bithumb, and Coinone, temporarily suspended all deposit and withdrawal services for KAVA tokens.
Kava Lend operates as a decentralized lending protocol within the Kava Chain infrastructure, allowing users to earn interest and borrow digital assets. Cross-chain bridges enable assets to move between distinct blockchain networks like Kava and BNB Smart Chain, though security flaws in bridge smart contracts can lead to unexpected asset movements and aggressive market selling.
The suspension of deposit and withdrawal channels across Upbit, Bithumb, and Coinone removes major liquidity options for retail holders and institutional traders in South Korea. Market participants will watch for a full technical post-mortem from Kava Chain explaining how the funds were accessed, as well as timeline updates from the exchanges regarding the resumption of normal wallet operations.
Reported and edited by the YourKhabri desk under our editorial policy. Nothing here is investment advice.