Balance Coin loses 99% after suspected exploit on BNB Chain, $915,000 affected

The stablecoin market experienced another severe upheaval as Balance Coin (BLC), an algorithmic stablecoin on BNB Chain, lost over 99% of its value. The incident followed a suspected exploit involving decentralized organizations 42DAO and GemJoin, resulting in a sharp decline from its $1 target to an all-time low of $0.001209 on July 22. Suspected attack linked to unauthorized token minting PeckShield, a leading blockchain security firm, assessed the loss from the suspected exploit at approximately $915,000. The attack came to light when TenArmor, a blockchain analytics provider, observed two suspicious transactions that appeared to be associated with GemJoin and 42DAO. 42DAO is a decentralized organization closely tied to Balance Protocol, which supports the BLC ecosystem. The first transaction reportedly involved the creation of about 4.5 million BLC tokens from a null address. These freshly minted tokens were quickly transferred to PancakeSwap V2, where they were swapped for Binance-pegged USDT (BSC-USD) and Binance Bitcoin (BTCB). PancakeSwap V2 is a decentralized exchange operating on BNB Chain and facilitates trading of BEP-20 tokens without intermediaries. Mini dictionary: PancakeSwap V2, an automated market maker decentralized exchange on BNB Chain, allows users to trade cryptocurrencies and provide liquidity directly from their wallets without a central authority. A second suspicious transaction took place roughly two hours later. The same method was used again, this time to mint an additional 5,900 BLC. These new tokens were also sold into the available decentralized exchange liquidity, facilitating further asset extraction by the attacker. Event BLC Tokens Minted Assets Swapped For First transaction 4.5 million BSC-USD, BTCB Second transaction 5,900 Various assets/liquidity Market impact and unresolved issues The unauthorized minting of large volumes of BLC tokens sharply increased the available supply. As these tokens flooded trading pools, significant selling pressure emerged, pushing the price of the stablecoin dramatically below its intended $1 threshold. 42DAO has not yet released a comprehensive post-incident report, leaving the exact technical vulnerability and the full damage assessment uncertain. In the absence of detailed findings, the wider implications for BLC holders and the broader Balance Protocol ecosystem remain unclear. Attackers gained the ability to mint new tokens, sell them rapidly, and create intense downward pressure, which caused BLC to lose more than 99% of its value and left the precise technical root of the exploit still unidentified due to limited public disclosure from the protocol’s core teams. Similar incidents in the DeFi ecosystem The Balance Coin collapse fits into a pattern of exploits targeting decentralized finance (DeFi) protocols through unauthorized token creation. In May, MAPO, another cryptocurrency, lost 96% of its value after attackers exploited a bridge vulnerability, generated unauthorized tokens, and sold them via decentralized exchanges.