Switchboard halts operations on Aptos, SUI, IOTA, and Movement after detecting potential compromise

Switchboard, the multi-chain oracle protocol that feeds price data to decentralized applications across several blockchains, shut down operations on its Move-based deployments after discovering what it described as a potential security compromise. The affected networks include Aptos, Sui, IOTA, and Movement. The halt, communicated during the transition from August 28 to 29, represents one of the more serious oracle-level incidents in recent memory. And the damage on at least one network was anything but theoretical. What happened on IOTA An attacker exploited a compromised oracle key to manipulate the IOTA price feed, temporarily setting the token’s price to $10 million. With the feed showing a wildly inflated IOTA price, the attacker was able to mint approximately 4.94 million VUSD through the Virtue CDP protocol. CDP, or collateralized debt position, protocols let users lock up assets and borrow stablecoins against them. When the oracle says your collateral is worth $10 million per token, the protocol happily lets you borrow accordingly. The fallout hit 45 users directly through liquidations. Exchange addresses were frozen in response to the chaos, and the Virtue CDP protocol its...