Truebit Protocol is facing a severe crisis after disclosing a security incident that triggered heavy losses and a market collapse.
The disclosure unsettled investors and raised fresh concerns about smart contract risks.
As details emerged, confidence in the protocol has eroded rapidly, and the incident now stands as one of the most damaging crypto exploits of early 2026.
Exploit linked to legacy smart contract flaw
Truebit confirmed on Thursday that it detected unusual activity on its platform and flagged a security incident on X.
The protocol said malicious actors exploited the system and added that it was coordinating with law enforcement authorities. At the time, the team did not disclose the scale of losses.
On-chain analytics firm Lookonchain estimated that attackers siphoned about 8,535 ETH. Based on prevailing prices, the exploit caused losses of roughly $26.6 million.
Security firm Cyvers also reported that a single address received the stolen ETH during the attack.
Independent blockchain researcher Weilin Li traced the exploit to a vulnerability in a legacy smart contract. Li said the issue involved a mispriced minting function in a contract deployed nearly five years ago. According to Li, the error allowed attackers to mint TRU tokens at deeply discounted rates.
Li reported that two attackers exploited the same flaw. One drained about $26 million, while the second gained close to $250,000. The researcher warned that attackers increasingly target older contracts that lack modern security assumptions.
Another on-chain analyst, known as n0b0dy, said the attacker repeatedly bought and sold TRU to exploit price movements and drain Ether. The wallet also paid a small builder bribe to accelerate transactions.
TRU token wiped out as panic selling takes hold
Market reaction followed quickly after the exploit became public. Truebit’s native TRU token collapsed almost instantly.
According to Coingecko data the token falling from about $0.16 to $0.0. The move effectively erased the token’s entire market value within hours.
The sharp decline reflected widespread panic selling as traders rushed to exit positions. The drop is a near-100% loss. The sell-off unfolded before the protocol announced any resolution or recovery plan.
The Truebit hack adds to a growing list of DeFi security incidents tied to outdated codebases. The many recent breaches exploit contracts that teams never upgraded.
While the TRU collapse dominated headlines, Ether showed limited spillover impact. Ethereum price dipped briefly after the news but held above the key $3,000 support level.
While the BROCCOLI manipulation surfaced earlier this year, that case failed to generate direct profits for attackers. By contrast, the Truebit exploit resulted in a confirmed multi-million-dollar drain and a total token wipeout.