Harmony's ONE Drops 40% After Reported Exploit Mints ~4B New Tokens

Harmony's ONE token slid roughly 40% on Wednesday after a suspected exploit reportedly created about 4 billion new tokens, jolting the market and prompting an emergency response. Harmony said it confirmed a network attack and urged validators and other operators to install an emergency software update intended to halt any additional unauthorized minting. The team said the patch should stop further token creation, but it will not reverse tokens already minted. Harmony added that it is assessing ways to isolate or remove the newly created tokens from circulation, including a potential rollback to a pre-exploit chain state. Before the incident, circulating supply stood at roughly 15 billion ONE. A reported mint of around 4 billion implies an immediate supply increase of about 26%, a level of dilution that can weigh heavily on price. Traders sold aggressively as participants assessed the risk that the new tokens could be deposited to exchanges, the extent of potential dilution, and whether transactions might be reversed. If the attacker succeeds in moving tokens onto centralized exchanges and selling them, additional supply could add further downside pressure. To limit contagion, Harmony temporarily paused its token bridge to reduce the risk of potentially compromised assets moving across networks. The team also flagged four wallet addresses it believes are connected to the incident and asked centralized exchanges to block and freeze funds associated with those addresses. Cooperation from exchanges and clear traceability could reduce losses, though containment becomes more difficult if tokens are routed through decentralized exchanges, bridged across chains, or dispersed across many wallets. On-chain monitoring may assist tracking but does not ensure recovery. Harmony has not publicly detailed the vulnerability, how minting authority was obtained, or independently confirmed the methodology behind the ~4 billion estimate. The emergency fix requires broad adoption by validators and infrastructure providers to be effective, making coordinated upgrading critical. Harmony said it is "working on a patch and rollback options." A rollback could remove the unauthorized issuance by reverting the chain to an earlier state, but it would also unwind legitimate transactions after the chosen point, a disruptive and controversial step. ONE fell to about $0.000605 before bouncing to trade above $0.00074. Technical signals remain decisively bearish: the 4-hour chart shows a rapid 40% slide in 24 hours, RSI near 12 (deeply oversold), and MACD aligned with the downtrend. Near-term risks include a retest of $0.000605 and a possible move toward the $0.00050 psychological level if selling persists. A recovery case would require buyers to reassert control, with a short-term target near $0.00112 if the 4-hour structure stabilizes. Harmony previously ranked among larger crypto projects, reaching about $4 billion in market value in January 2022. The incident, along with uncertainty around the final token count and the underlying vulnerability, is reviving scrutiny of the network's security and governance. Key items to watch include: Harmony's technical disclosure on how the exploit occurred and the precise number of tokens minted; adoption of the emergency update among validators; whether exchanges freeze funds tied to the flagged addresses and whether tokens move through DEXs or across chains; and any decision to pursue a rollback, along with the governance debate it would trigger. Harmony said additional updates will follow as the investigation continues.