Saga Halts On-Chain Operations After $7 Million Attack Loss, Stablecoin Plunges to $0.75

On January 22, Layer-1 blockchain protocol Saga paused its Ethereum-compatible SagaEVM chainlet hours after suffering an attack that resulted in roughly $7 million in losses. The incident involved unauthorized funds being transferred cross-chain and swapped for ETH, causing the project’s stablecoin, the Saga Dollar, to depeg—dropping to a low of $0.75. The Saga team noted the chain was paused at block height 6,593,800. Initial investigations indicate the attack involved a series of contract deployments, cross-chain operations, and liquidity withdrawals—but no consensus failures, validator compromises, or key leaks. The mainnet’s overall structure remains secure, per the team. Beyond the Saga Dollar, its stablecoins Colt and Mustang were also impacted. The team has locked the attacker’s fund addresses and is collaborating with exchanges and cross-chain bridges to blacklist them. The chain will stay paused until a full security audit and post-mortem analysis are completed and disclosed. On-chain data shows Saga’s total value locked (TVL) plunged from ~$37 million to $16 million in 24 hours—a roughly 55% drop. Some security researchers speculate the attack may stem from exploiting the cross-chain mechanism to enable “infinite stablecoin minting,” while others suggest a possible key leak. Official confirmation of the exact attack vector is pending.