Cosmos Hub Moves $2.1M of Stolen ATOM After 25-Hour Halt

Cosmos Hub resumed producing blocks on Wednesday morning, after validators halted the network for nearly 25 hours. In the very first block after the restart, 1,227,121 ATOM, worth about $2.1 million, moved out of the wallet holding proceeds from the Neutron governance attack, into a newly created address, with no transaction signed by the wallet's owner.

If you hold ATOM or NTRN, that is the line to read carefully. It tells you two things at once: the Hub is back, and the network update its validators spent Tuesday preparing was built to move stolen tokens away from the attacker.

What the restart actually did

The Hub came back online Wednesday morning. Three things happened in the first few minutes:

In the first block after resumption, the 1,227,121 ATOM left the attacker's wallet. The Cosmos Hub's Tuesday restart notice said the network update was "intended to address the stolen ATOM currently held on the Hub," and the transfer appears in the block's events without a transaction signed by the wallet's owner, which means the network did not wait for the attacker to cooperate.

About a minute after the restart, a THORChain vault that had received two earlier attacker swaps sent back 168,991 ATOM, the unfilled part of a 200,000-ATOM swap the attacker had submitted before the halt. That return was worth about $294,000 at the time, and was still sitting in the attacker's wallet at 11:15 a.m. ET.

Two minutes after the restart, the attacker tried to send 500,000 ATOM to Osmosis. The transfer failed for insufficient funds. The wallet no longer held enough to make the move.

The Cosmos Hub account's Tuesday restart notice also said the Hub itself "was not exploited and no funds were impacted apart from the assets moved from Neutron," which is the closest thing you have right now to a clean bill of health for ATOM holders who were not touched by the Neutron attack.

How the tokens got stolen in the first place

The starting point was Neutron proposal 9, titled "AIATO: AI Agent Takeover. Phase 1: Agent Admin Registration." Neutron moved into a long-term maintenance phase back in June, and its expedited governance track lets proposals clear in three days.

Proposal 9 passed when voting closed at 10:24 p.m. ET on Monday, with about 82% of votes in favor. It carried 11 messages that handed admin control of Neutron contracts to the proposer's own address. Ten of those contracts belonged to the decentralized exchange Astroport and the liquid staking protocol Drop. An on-chain analysis the X user Rarma published on Tuesday identified which ones.

Rarma wrote that the account carrying most of the yes vote bought about 31.6 million NTRN with 20,199 USDC and staked it less than 12 minutes before voting closed, giving it the weight to push the proposal through. Rarma described the result as the vote "overriding two protocols' own governance, on contracts the chain did not own."

Once the proposal passed, the attacker swapped the code of 10 of the 11 contracts and emptied them in less than half an hour. Rarma valued the take at about $9.4 million. Rarma also wrote that about $1.96 million of the stolen tokens sat on chains that were still running at the time of the analysis, meaning they had not yet been moved off those chains.

Spaydh, a former Neutron contributor, posted that the chain "was halted to prevent further harm." Astroport told users on X to "withdraw your liquidity from Astroport on all chains until further notice."

Where this leaves you

Neutron has not produced a block since 3:43 a.m. ET on Tuesday, its public nodes show. The Cosmos Hub account has not disclosed who controls the new address that received the 1,227,121 ATOM in the first post-restart block, and no public on-chain explorer record of the proposal 9 vote has been linked. It is also not clear yet whether more of the $9.4 million drained from Astroport and Drop has been recovered beyond the roughly $2.1 million moved on restart and the $294,000 returned by THORChain.

For context: in August, Cronos stopped its own blockchain after an estimated $75 million exploit at lending protocol Tectonic. The Cosmos Hub is back. Neutron is not.