K9 Finance Proposes $23,000 Bounty to Recover Stolen Funds After $2.4M Shibarium Bridge Hack
K9 Finance, the decentralized finance platform operating on Shiba Inu’s Shibarium layer-2 network, announced a $23,000 bounty to the hacker responsible for a recent $2.4 million exploit targeting its bridge. The offer aims to incentivize the return of the stolen assets and remains valid for 30 days, with the bounty amount decreasing after one week.
On Monday, K9 Finance issued an onchain message to the attacker stating: “Settlement is atomic when we call recoverKnine(). If you call accept() we cannot cancel the deal. Code is law.” The message underscored urgency, urging the attacker to act swiftly to claim the bounty.
Details of the Shibarium Bridge Exploit
The breach occurred on Saturday when attackers exploited validator signing keys, enabling them to gain majority control over the bridge validators. They used a flash loan to acquire approximately 4.6 million Bone ShibaSwap (BONE) tokens, which facilitated the signing of a malicious transaction that drained $2.4 million worth of digital assets from the bridge.
In response, Shiba Inu developer Kaal Dhairya confirmed that the team has paused all stake and unstake functions on the network. Additionally, they transferred stake manager funds into a hardware wallet secured by a multisignature setup to prevent further unauthorized access.
“Restoring network security and protecting user assets remain our highest priorities,” Dhairya stated. The team is actively working with cybersecurity firms Hexens, Seal 911, and PeckShield to investigate the incident thoroughly.
Market Reaction and Token Impact
The exploit triggered immediate negative price movements across the Shiba Inu ecosystem. The SHIB token declined by approximately 7%, falling from $0.0000145 to $0.0000131. K9 Finance’s native token, KNINE, dropped by 10%, while the BONE token suffered the steepest loss, plunging 38% from $0.31 to $0.19 within two days.
Broader Context: Related Security Incidents
This incident follows a smaller-scale attack affecting THORChain co-founder John-Paul Thorbjornsen, who lost $1.35 million in a Telegram meeting call scam, as reported by blockchain investigator ZachXBT. The Shibarium exploit highlights ongoing security challenges within the DeFi space, especially concerning validator key management and bridge vulnerabilities.
FinOracleAI — Market View
The announcement of a $23,000 bounty by K9 Finance is a proactive step aimed at recovering stolen assets and mitigating reputational damage. However, the exploit exposes serious vulnerabilities in validator key security and bridge architecture, which could weigh on investor confidence in the short term. Market reaction has been negative, reflected in significant token price declines.
Key risks include the possibility that the attacker refuses to cooperate, prolonging uncertainty and potential fund losses. Monitoring the investigation outcomes and any asset recovery will be critical. The team’s engagement with reputable security firms and authorities is a positive sign for restoring trust.
Impact: negative
