# Allbridge Halts Protocol Following $1.65M Exploit Targeting Stablecoin Liquidity Pools Stablecoin liquidity pools targeted, funds moved to Ethereum. - **Source:** [CryptoPotato](https://brifing.si/source/bd22636b-ec8d-42a8-8cca-1937c50e0f6c) - **Published:** 2026-07-20 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/39c76495-b103-4585-91ed-ba6d855357f9 ## Security Breach and Losses Allbridge Core suffered a security breach resulting in approximately $1.65 million in losses. Blockchain security firm PeckShield reported that the attacker bridged the stolen funds from Solana to Ethereum. Allbridge paused the protocol as a precaution and urged users to withdraw funds from affected pools. ## Arbitrage Opportunity The exploit created a temporary arbitrage opportunity due to imbalances in the affected liquidity pools. Allbridge requested those who profited from the arbitrage to voluntarily return the funds, which will be used to compensate affected liquidity providers. ## Flash Loan Exploit Onchain Labs explained that the attack began with a $1.12 million USDC flash loan obtained from Kamino on Solana. The attacker manipulated Allbridge Core's stablecoin pool ratios through rapid USDC and USDT swaps and withdrew liquidity at distorted rates. ## Funds Mixing The stolen assets were later mixed through privacy protocols. Such attacks have become a recurring issue in the blockchain ecosystem, highlighting the need for enhanced security measures. ## Previous Similar Attacks Allbridge faced a similar attack in April 2023, losing around $573,000 in a flash loan exploit on BNB Chain. The attacker exploited a bug in smart contracts to manipulate token swap prices. ## Bridge Protocols and Security Cross-chain bridges remain a favorite target for hackers. Recent attacks on Syndicate Labs and Verus-Ethereum bridges underscore the urgent need for improved security measures in the blockchain ecosystem. ## Sources covering this story - https://cryptopotato.com/allbridge-pauses-protocol-after-1-65m-exploit-drains-stablecoin-liquidity-pools/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._