ALEX Protocol Faces Second Major DeFi Security Exploit

Estimated reading time: 4 minutes

• ALEX Protocol suffered a second major exploit on June 6, 2025, leading to a suspension of all platform operations.
• The exploit caused partial loss of funds and led to the depegging of aBTC and sBTC tokens.
• This incident follows a previous hack in May 2024, resulting in a loss of approximately $4.3 million.
• Ongoing security challenges highlight concerns for DeFi protocols operating on Bitcoin infrastructure.
• Investigations are underway as the ALEX team works to rebuild user confidence in the platform.

ALEX Protocol, a decentralized finance platform built on the Stacks blockchain and focused on Bitcoin, has experienced a second major security incident. On June 6, 2025, the ALEX team suspended all platform operations following the detection of an exploit that caused a partial loss of funds and led to the depegging of its aBTC and sBTC tokens from their intended Bitcoin value[1].

At this time, information about the most recent breach remains limited. The team has not released details regarding the method of the exploit, the amount of cryptocurrency stolen, or specific technical weaknesses involved. The platform is currently offline, and an investigation is underway[2]. The sudden depegging of aBTC and sBTC, which are widely used Bitcoin-pegged assets within the Stacks ecosystem, has raised concerns among users and contributed to increased volatility in the broader Bitcoin DeFi market[3].

This marks the second major security incident for ALEX Protocol in a little over a year. In May 2024, the platform experienced another exploit, resulting in the loss of approximately $4.3 million in crypto assets[4]. That attack was traced to a private key compromise affecting the XLink bridge, an essential tool for enabling token transfers between different blockchains[5]. According to security firm CertiK, the attacker gained access to a private key central to the bridge service, which enabled the rapid transfer of more than $300,000 in bitcoin and various other assets, including aBTC, sUSDT, XBTC, and native platform tokens[6][7].

After the 2024 breach, questions were raised about the security of DeFi protocols relying on Bitcoin infrastructure. Blockchain investigator ZachXBT and others attributed the 2024 hack to the Lazarus Group, a North Korean state-backed entity linked to several high-profile cryptocurrency attacks[8]. Investigators cited substantial transaction evidence, including the identification of two cryptocurrency addresses used to track the movement of the stolen assets[8].

Following last year’s exploit, the ALEX team offered the attackers a 10% bounty in return for 90% of the stolen funds and worked with major exchanges to freeze assets connected to the incident[9]. By mid-May 2024, ALEX had recovered the majority of the lost tokens and continued to track activity in the exploiter’s wallets. However, the team acknowledged that it was uncertain whether full recovery would be possible[10][11].

Despite these efforts, the recurrence of a significant exploit at ALEX Protocol highlights ongoing security challenges in both the platform and the wider Bitcoin DeFi sector. Private key theft remains a frequent and damaging tactic used against decentralized platforms[12]. The recent depegging of aBTC and sBTC has prompted fresh questions about the reliability and security of Bitcoin-pegged assets, as well as DeFi projects’ ability to protect user funds and maintain market trust[3].

As the investigation into the June 2025 incident continues, users and industry observers are watching to see how ALEX Protocol will respond, both in technical actions and in attempts to rebuild confidence in a sector facing persistent digital asset security threats.

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1. Protos, June 6, 2025, “Bitcoin DeFi project ALEX exploited again: aBTC and sBTC depeg” (https://protos.com/bitcoin-defi-project-alex-exploited-again-abtc-and-sbtc-depeg/)
2. Bitcoin World, June 6, 2025, “ALEX Platform Security Incident” (https://bitcoinworld.co.in/alex-platform-security-incident/)
3. Protos, June 6, 2025, “Bitcoin DeFi project ALEX exploited again: aBTC and sBTC depeg” (https://protos.com/bitcoin-defi-project-alex-exploited-again-abtc-and-sbtc-depeg/)
4. CoinDesk, May 15, 2024, “Bitcoin DeFi Tool ALEX Lab Loses $4.3M in Hack, Offers 10% Bounty for Stolen Funds” (https://www.coindesk.com/business/2024/05/15/bitcoin-defi-tool-alex-lab-loses-43m-in-hack-offers-10-bounty-for-stolen-funds)
5. CoinDesk, May 15, 2024, “Bitcoin DeFi Tool ALEX Lab Loses $4.3M in Hack, Offers 10% Bounty for Stolen Funds” (https://www.coindesk.com/business/2024/05/15/bitcoin-defi-tool-alex-lab-loses-43m-in-hack-offers-10-bounty-for-stolen-funds)
6. CoinDesk, May 15, 2024, “Bitcoin DeFi Tool ALEX Lab Loses $4.3M in Hack, Offers 10% Bounty for Stolen Funds” (https://www.coindesk.com/business/2024/05/15/bitcoin-defi-tool-alex-lab-loses-43m-in-hack-offers-10-bounty-for-stolen-funds)
7. CryptoRank, May 16, 2024, “DeFi protocol ALEX Lab $4 million hack linked to Lazarus group” (https://cryptorank.io/news/feed/01efd-defi-protocol-alex-lab-4-million-hack-linked-to-lazarus-group)
8. The Block, June 2024, “Bitcoin DeFi ALEX Lab exploit linked to Lazarus Group” (https://www.theblock.co/post/301722/bitcoin-defi-alex-lab-lazarus)
9. CoinDesk, May 15, 2024, “Bitcoin DeFi Tool ALEX Lab Loses $4.3M in Hack, Offers 10% Bounty for Stolen Funds” (https://www.coindesk.com/business/2024/05/15/bitcoin-defi-tool-alex-lab-loses-43m-in-hack-offers-10-bounty-for-stolen-funds)
10. CryptoRank, May 16, 2024, “DeFi protocol ALEX Lab $4 million hack linked to Lazarus group” (https://cryptorank.io/news/feed/01efd-defi-protocol-alex-lab-4-million-hack-linked-to-lazarus-group)
11. CryptoRank, May 16, 2024, “DeFi protocol ALEX Lab $4 million hack linked to Lazarus group” (https://cryptorank.io/news/feed/01efd-defi-protocol-alex-lab-4-million-hack-linked-to-lazarus-group)
12. CoinDesk, May 15, 2024, “Bitcoin DeFi Tool ALEX Lab Loses $4.3M in Hack, Offers 10% Bounty for Stolen Funds” (https://www.coindesk.com/business/2024/05/15/bitcoin-defi-tool-alex-lab-loses-43m-in-hack-offers-10-bounty-for-stolen-funds)