What to Know:
- Attacker minted 5B fake GAIN tokens, sold for ~$3M, CertiK reports.
- Price dropped 82.76% in 24h despite fresh Binance & KuCoin listings.
- Griffin AI faces urgent pressure to recover or risk token collapse.
Yesterday, Griffin AI’s highly anticipated token, GAIN, was trading on top exchanges after a bullish multi-exchange debut. Just 24 hours later, it crashed by more than 80% following a devastating security exploit that shook confidence in the project.
On September 25, blockchain security firm CertiK reported on X that Griffin AI had been exploited through a LayerZero vulnerability. According to their analysis, the attacker set up a false LayerZero peer on Ethereum, then minted 5 billion fake tokens. These were bridged to Binance Smart Chain, converted into genuine GAIN tokens, and later dumped into the market. CertiK estimated that the attacker netted around $3 million from the exploit before laundering the funds back to Ethereum and depositing them into Tornado Cash.
From Bullish Listings to Sudden Collapse
Ironically, Griffin AI’s troubles come just one day after what looked like a major win for the project. Yesterday, GAIN was listed across five major exchanges, including Binance, KuCoin, and Gate.io.
Griffin AI had promoted GAIN as the utility token for its AI-powered DeFi platform, powering premium agents, advanced trading features, and expanded builder capacity. KuCoin highlighted the launch by noting that Griffin AI already had 15,000 live AI agents automating yield strategies across blockchains and Gate.io listings specifically targeted Chinese retail users, with Griffin AI’s TEA trading agent marketed to Asian DeFi investors.
At the time, analysts called the listings “bullish” since immediate access across top-tier exchanges usually boosts liquidity and credibility. But the exploit turned what should have been a growth milestone into a crisis.
Market Fallout
The size of the exploit was terrible for the token’s price and reputation. GAIN is currently trading at $0.1835, which is a shocking 82.76% drop in the last 24 hours.
The collapse was caused by three main things:
1. Supply Shock Caused by Exploitation
Before the attack, there were only 235 million GAIN tokens in circulation. The attacker made 5 billion of them. That means that the supply went up by more than 2,000% overnight, which destroyed scarcity and flooded the markets with extra tokens.
2. Selling in a hurry and liquidity stress
Trading volume shot up by more than 12 million percent, hitting $187 million as investors rushed to get out. Prices fell and technical support disappeared because there were more sellers than buyers.
3. CEX Listings Are Not as Important
Normally, exchange listings are good for the market, but this time they helped the attacker get away. New liquidity didn’t bring in new demand; it sped up the dump.
Broader Concerns
Security vulnerabilities aren’t new in crypto, but Griffin AI’s case is especially bad because of when it happened. The project was in the news just the day before, for being new and quickly gaining popularity. A lot of investors thought Griffin AI was a good mix of AI and DeFi because it gave users AI-powered agents to carry out complicated trading and yield strategies.
The exploit makes people wonder if the project can even get back on its feet. The first thing to worry about is whether Griffin AI can freeze or disable the attacker’s wallet, which is said to be 0xf3d1…8db2, or work out a buyback to restore the token balance.
GAIN could lose value permanently if the extra 5 billion tokens stay in circulation. If nothing is done, it might not work as the utility token Griffin AI had in mind.
What Comes Next?
The Griffin AI team is the center of attention right now. People in the community are waiting for an official recovery plan, but if there is no communication or it takes too long, trust could be lost even more. Investors are also keeping an eye on exchanges like Binance and KuCoin to see if trading stops or emergency measures are put in place.
The incident highlights two important truths for the crypto world even well-promoted, well-listed tokens can collapse overnight if security is compromised and strong utility and adoption aren’t enough if underlying protocols leave room for attackers.
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