The DeFi space took another hit on February 7,2026, when CrossCurve. fi, a cross-chain liquidity protocol formerly known as EYWA, lost roughly $3 million to a cleverly executed exploit. Attackers spoofed cross-chain messages via the Axelar network, slipping past validation checks in the ReceiverAxelar contract to drain funds from the PortalV2 contract. This CrossCurve. fi exploit exposes a recurring nightmare in crosschain DeFi hacks: the fragility of message-passing between blockchains.
CrossCurve. fi relies on Axelar for general message passing (GMP), enabling seamless liquidity transfers across chains. But the SDK version 5.10.0, integrated into their bridge, harbored a flaw. Security researchers pinpointed issues in how the ReceiverAxelar contract processed incoming messages. Under typical operations, cross-chain calls require verifying the source gateway and payload integrity. Here, attackers crafted spoofed payloads that mimicked legitimate executions, bypassing those safeguards and triggering unauthorized token releases.
Dissecting the ReceiverAxelar Drain
At the core of this Axelar vulnerability lies improper handling in the ReceiverAxelar contract’s message execution logic. Protocols using AxelarExpressExecutable inherit a base implementation that assumes gateway validation occurs upstream. Yet, as detailed by analysts like Piyush Shukla, CrossCurve’s setup lacked a crucial check on message authenticity. Attackers replayed or forged GMP calls, convincing the contract that funds should unlock from PortalV2 – a vault meant to secure bridged assets.
Intellectia AI’s report clarifies the flow: a spoofed message evades the gateway, lands on the target chain, and executes as if authorized. This allowed drains across multiple networks, hitting ten recipient wallets. The precision of the attack highlights sophisticated reconnaissance; the exploiter likely probed the SDK’s weaknesses long before striking.
Attacker spoofed Axelar crosschain messages to bypass gateway validation and drain PortalV2.
Such bypasses aren’t isolated. Cross-chain bridges aggregate billions in TVL, making them magnets for smart contract cross-chain insurance gaps. Developers must audit GMP integrations rigorously, especially patterns flagged by CrossCurve’s own team post-incident.
Exploit Timeline: From Breach to Bounty
The breach unfolded rapidly. Initial alerts surfaced via on-chain monitoring, with the attacker siphoning funds in batches to obscure trails. CrossCurve swiftly paused interactions, a textbook response to limit damage. They invoked a 10% whitehat bounty, incentivizing returns on unlaundered proceeds. Meanwhile, Curve Finance urged voters to revoke support for CrossCurve pools, averting governance ripple effects.
This sequence reveals operational maturity amid chaos. Yet, it also spotlights delays in SDK patching; Axelar GMP v5.10.0’s risks were known peripherally, but adoption lagged. For users, the fallout meant frozen positions and eroded trust in cross-chain liquidity.
Broader Risks in Cross-Chain Infrastructure
CrossCurve’s ordeal amplifies warnings about message misdelivery in bridges. Flaws like these can cascade, exposing lending protocols to inconsistencies – as explored in detailed analyses of similar risks. The cross-chain message misdelivery risks underscore why protocols need layered defenses: oracle validations, timelocks, and multi-sig overrides.
In my view, relying solely on SDKs from networks like Axelar courts danger without custom wrappers enforcing checks. CrossCurve. fi developers now face scrutiny, but the incident pushes the ecosystem toward hardened standards. Investors watched helplessly as $3 million evaporated, reinforcing the case for proactive DeFi exploit coverage CrossCurve users might have mitigated this through targeted policies.
Looking deeper, the ReceiverAxelar drain via spoofed messages isn’t just code failure; it’s a symptom of rushed interoperability. Protocols bridging Ethereum, Cosmos, and beyond must prioritize simulation testing under adversarial GMP conditions.
Simulation tools like Foundry or Echidna can replay GMP payloads at scale, uncovering edge cases that static audits miss. CrossCurve’s post-mortem will likely reveal such oversights, but the damage is done: $3 million gone, trust fractured.
The Vulnerable Code Pattern Exposed
To grasp the ReceiverAxelar drain, consider the inherited logic from AxelarExpressExecutable. This base contract processes payloads without re-verifying source chains in every execution path, a subtlety exploited here.
Vulnerable `_execute()` in AxelarExpressExecutable v5.10.0
The core vulnerability resides in the `AxelarExpressExecutable` contract (v5.10.0), where the `_execute` function processes cross-chain commands without verifying the source gateway:
```solidity
function _execute(
bytes32 commandId,
string calldata symbol,
bytes calldata data
) internal virtual {
// Vulnerable: Lacks source gateway address verification
// Allows spoofed msg.sender in cross-chain calls
}
```
**Note:** In a secure implementation, this function should validate `msg.sender` against the expected source gateway address retrieved via the Axelar gateway contract.This omission permits attackers to forge messages by directly invoking `_execute` or spoofing `msg.sender`, bypassing validation logic in dependent contracts like `ReceiverAxelar` and enabling unauthorized token transfers.
Analysts noted the absence of a simple require(msg. sender == trustedGateway, "Unauthorized") or payload signature replay protection. Attackers forged GMP calls with tampered source fields, tricking PortalV2 into releasing locked tokens. Upgrading to v5.11.0 or adding custom guards could have prevented this, yet legacy integrations persist across DeFi.
This crosschain DeFi hack pattern echoes past bridge failures, from Wormhole to Ronin. Each incident refines our defenses, but adoption of fixes trails exploits. Developers, take heed: fork and harden SDKs rather than plug-and-play.
Mitigation Essentials: A Developer Checklist
Beyond code, protocols need economic safeguards. CrossCurve’s whitehat bounty worked in prior scares, recovering portions, but proactive insurance layers the bet. Users locked in pools during the pause faced illiquidity risks; diversified coverage would have cushioned that.
Shifting to protection, smart contract cross-chain insurance emerges as the unsung hero. Platforms like Nexus Mutual or InsurAce offer policies tailored to bridge exploits, reimbursing verified drains. For CrossCurve victims, retroactive claims might apply if pools qualified, but forward-thinking users insure positions upfront.
Navigating DeFi Exploit Coverage Post-CrossCurve
In my experience bridging TradFi risk models to DeFi, coverage isn’t a luxury- it’s arithmetic. Policies typically cover 80-95% of losses after deductibles, with premiums tied to protocol TVL and audit scores. CrossCurve’s hit underscores gaps in Axelar-dependent bridges; insurers now scrutinize GMP versions in underwriting.
Compare options: Armor. fi excels in real-time param adjustments for cross-chain risks, while Unslashed focuses on oracle/message validations. For DeFi exploit coverage CrossCurve style events, seek policies excluding only “known vulnerabilities” post-disclosure. Data shows insured protocols recover 40% faster, stabilizing sentiment.
Users should query coverage scopes: does it encompass spoofed GMPs? Payout timelines? Whitehat clawbacks? Defi Coverage streamlines this, aggregating quotes and risk scores. Our tools let you simulate claims for Axelar-like scenarios, ensuring alignment with threats like this $3 million drain.
Forward, expect Axelar to release hardened SDKs, but protocols can’t wait. Integrate merkle proofs for message batches or threshold signatures for high-value unlocks. CrossCurve’s transparency- pausing swiftly, bountying aggressively- sets a benchmark, yet prevention trumps response.
The ecosystem evolves through fire. This exploit, while painful, accelerates maturity in cross-chain DeFi. Arm yourself with audits, simulations, and insurance; secure yields demand nothing less. As TVL migrates to bridges, so must rigorous risk frameworks.
About the Author
