The Layer-1 blockchain Saga has officially suspended its EVM network following a major security breach. Attackers successfully siphoned approximately $7 million in USDC, triggering a liquidity crisis and the collapse of the platform’s native stablecoins.
The Anatomy of the Attack
According to an official project blog post, the breach was not a simple exploit but a “coordinated sequence of actions.” The hackers followed a sophisticated three-step process:
- Deployment of malicious smart contracts.
- Execution of complex cross-chain operations.
- Extraction of liquidity via a cross-chain bridge, followed by immediate conversion into Ethereum (ETH).
The project team has already identified the attacker’s wallet address and is working with exchanges and bridge operators to freeze the stolen assets.
Market Impact and Asset Depegging
While the Saga mainnet (SSC), its consensus mechanism, and its validators remain secure, the SagaEVM ecosystem has been hit hard. The incident caused an immediate loss of confidence in the platform’s pegged assets.
Impact Summary:
| Asset | Status | Outcome |
| SagaEVM | Suspended | All operations halted pending investigation |
| Colt & Mustang | Depegged | Both stablecoins have lost their $1.00 parity |
| Token D | Depegged | Dropped sharply to $0.7 |
| SAGA (Native) | Down | Price fell 5.2% to $0.05 |
Technical Analysis: Two Primary Theories
Security experts are currently debating the exact entry point of the exploit. Two main theories have emerged:
Theory 1: Smart Contract Vulnerability
Cybersecurity expert Vladimir S. suggests the flaw lies within the Saga Dollar contract. He notes that the attacker bypassed “bridge precompile” logic checks by using custom messages, which allowed for the unlimited minting of D tokens without any collateral.
Theory 2: Private Key Compromise
On-chain analyst “Specter” argues that the precision of the attack points toward a compromised private key, giving the attacker administrative control over the network’s liquidity pools.
The Broader Context: A Record Year for Crypto Theft
The Saga exploit comes during a particularly volatile week for the DeFi sector, following a $5 million hack of Makina Finance.
The statistics for 2025 are increasingly grim for the industry. Total stolen funds have reached $3.4 billion, the highest volume since 2022. A significant portion of these losses (69%) stems from just three major incidents, including the massive $1.46 billion Bybit exploit.
Current Status: SagaEVM will remain offline until the developers conclude their investigation. Users are advised to monitor official channels for a detailed post-mortem report and updates on the recovery of funds.
