Garden Finance Halts Service After Solver Database Breach, Loss Estimated at $450,000

Garden Finance, a cross-chain bridge and atomic-swap protocol, has temporarily suspended services after an independent solver's off-chain database was breached. The protocol and its smart contracts were not hacked, and no user funds were affected, according to the company.

Cointelegraph reported on July 27 that blockchain security firm Blockaid said an attacker stole about $450,000 worth of Tether (USDT) on Ethereum, Base, Arbitrum and BNB Chain through Garden Finance's hash time-locked contracts, or HTLCs.

Garden Finance said its HTLC smart contracts and protocol were not directly compromised. Instead, the attacker breached the off-chain database of one of the independent solvers participating in the network and inserted false transaction records.

As a result, the solver sent funds for swap transactions without actually receiving funds from the counterparty. The lost assets belonged to the affected solver, while user funds were neither lost nor exposed to risk.

The company said it is still verifying the exact size of the losses, the assets involved and the affected networks. As a precaution, Garden Finance halted services after the incident and isolated affected infrastructure for inspection.

Garden Finance is working with security firms zeroShadow, Quantstamp and Blockaid to trace and recover the stolen funds. It said services will resume once the security review is complete, but did not provide a specific timeline.

Garden Finance suffered a similar incident in October last year, when one solver's operating environment was compromised and about $11.4 million was stolen. The company said at the time that its protocol contracts and user funds were not affected.