Truebit Token Crashes After $26.6 Million Ether Drain Exposes Legacy Contract Flaw

• Truebit exploit drained over $26 million after attackers abused a legacy smart contract still linked to active liquidity pools.

• TRU token collapsed to near zero within hours as panic selling spread across markets and liquidity vanished rapidly.

• The incident shows how outdated DeFi contracts remain a major security risk despite years of protocol upgrades.

Truebit Protocol suffered a major security breach on Thursday, triggering one of the sharpest token collapses recorded in 2026. On-chain data confirmed attackers drained about 8,535 ether, valued near $26.6 million.

Truebit’s TRU token plummeted nearly 100% after an exploit drained about 8,535 ether, valued at approximately $26.6 million, from its reserves.

The attack exploited a flaw in an older smart contract, allowing the attacker to buy TRU at no cost and sell it back to extract ether. pic.twitter.com/gWn5sgCJ1Q

— TheCryptoBasic (@thecryptobasic) January 9, 2026

As the exploit unfolded, the TRU token crashed from roughly $0.16 to near zero within hours. The sudden decline caused panic selling and disrupted liquidity across several trading venues. Market participants struggled to react as volatility intensified within a short timeframe.

Legacy Contract Flaw Enabled the Exploit

Investigators traced the breach to an outdated smart contract still connected to active liquidity pools. The contract contained a pricing error that allowed attackers to mint TRU tokens at zero cost. Using this flaw, attackers repeatedly bought and sold TRU to extract ether from protocol reserves. Moreover, rapid transaction sequencing helped bypass early Ethereum network safeguards. These conditions allowed the exploit to scale quickly before detection.

On-chain monitoring tools flagged abnormal transaction patterns shortly after the exploit began. Analysts observed trades that did not align with normal protocol activity. In addition, a single wallet received most of the drained ether within minutes. The attacker also used small builder bribes to gain block priority. Consequently, the exploit achieved high extraction speed across multiple blocks.

On-Chain Analysis Points to Multiple Actors

Further investigation revealed that the exploit relied on a flawed minting function embedded years earlier. The vulnerable code dated back nearly five years and survived several protocol upgrades. Developers never retired the old permissions during previous network transitions. As a result, the legacy contract retained access to liquidity pools. This oversight created an entry point for attackers familiar with historical deployments.

Blockchain researchers also identified activity suggesting two attackers acted during the exploit window. One address captured approximately $26 million worth of ether from the protocol. Another address gained around $250,000 after identifying the weakness later. Meanwhile, opportunistic traders appeared to monitor mempool data during the volatility. These interactions added further complexity to the on-chain activity.

Market Fallout Accelerates Token Collapse

The Truebit team acknowledged awareness of the security incident shortly after discovery. They cautioned users against interacting with the affected contract address. Developers also contacted law enforcement and launched internal investigations. However, they did not immediately confirm any contract pauses during the initial response. This uncertainty contributed to growing market anxiety.

Selling pressure intensified as liquidity evaporated across trading platforms. The TRU token fell close to zero, leaving many holders unable to exit positions. Thin order books worsened losses as arbitrage flows stalled. Consequently, years of accumulated market capitalization disappeared within hours. The collapse highlighted the speed at which confidence can erode.

DeFi Exploits Highlight Legacy Code Risks

The Truebit incident adds to a growing list of decentralized finance security failures. Security firms report attackers increasingly target forgotten permissions in older contracts. Protocol development often outpaces comprehensive audits of legacy deployments. Therefore, mispriced logic embedded years ago can remain unnoticed. These vulnerabilities continue to pose systemic risks across the sector.

Recent incidents reflect similar patterns across major platforms. Balancer reported losses exceeding $120 million due to a rounding error. Bunni and Nemo also disclosed contract drains linked to outdated logic. Separately, Kontigo experienced a wallet breach involving over 340,000 USDC but issued reimbursements. Trust Wallet faced a Chrome extension exploit that drained roughly $7 million from users.