Chainflip resets TRON USDT provider balances to zero after 736000 USDT exploit

Chainflip will reset affected liquidity providers' active TRON USDT balances to zero as part of a restart plan following a 736442.17 USDT exploit disclosed on Sept. 12. The protocol will record each provider's pre-migration balance on-chain, preserving the owed amount despite the active account showing zero. Repayment is still pending. By Sept. 16, Chainflip resumed swaps and quoting across the network, excluding TRON. The attacker exploited the protocol by causing six liquidity-provider withdrawals to be paid twice between 01:44 and 03:10 UTC on Sept. 12. The attack involved submitting a transaction already signed by validators with a malformed memo, leading to an erroneous refund. Chainflip's TRON vault now holds significantly less USDT than owed to providers. The migration plan includes closing open TRON/USDT orders and unwinding related positions. Each provider's pre-migration trxUSDT amount will be recorded separately before resetting the active account balance to zero. Chainflip has committed to compensating affected providers but has not disclosed a funding source or payout schedule. The protocol has patched the vulnerability by restricting which TRON transfers can include swap instructions in a memo, blocking the exploit route. All other funds remain unaffected.

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