Nomic Bitcoin Bridge Exploit Lets Attackers Mint Unauthorized nBTC on Osmosis

Osmosis said an exploit on Nomic allowed unauthorized minting of nBTC through a bug in a custom forwarding mechanism, creating a shortfall in the Bitcoin-backed asset used on the DEX. In a community Hall proposal, the team said the issue did not compromise Osmosis or IBC directly, but did affect the backing for Alloyed BTC on the platform.

The exchange said 39.84 nBTC were affected, which it described as roughly 36% of Alloyed BTC backing. Osmosis also said it froze inflows and outflows tied to the affected asset and used an emergency upgrade to freeze 22.65 BTC held at an attacker-associated address.

Recovery now depends on governance action

According to Osmosis, the next step is a governance proposal that would seek to seize the frozen assets and use BTC from the community pool to restore full backing. The proposal language suggests the team is treating the incident as a contained bridge-level exploit rather than a failure of the Osmosis chain itself.

The incident appears to have centered on Nomic’s forwarding path for nBTC, which Osmosis said allowed double-spending and the creation of false vouchers sent to the DEX. Osmosis did not say the broader IBC protocol was breached.

The update leaves open the final resolution for affected users and liquidity, but the immediate response has been to halt movement of the impacted asset and move recovery into governance.