Ostium says it is preparing to reopen trading this week after an exploit drained 23,752,746 USDC from its liquidity provider vault on Arbitrum. The platform said final checks are under way with auditors, outside cybersecurity specialists, and internal engineers, and that users will receive at least 24 hours’ notice before the restart.

Trading pause and planned restart

The exchange halted activity after the July 15 incident, leaving trader and liquidity provider funds frozen for nearly a week. In an update issued Monday, July 20, Ostium said the relaunch would mark the first chance for users to manage positions since the pause began.

When trading resumes, positions that were frozen during the shutdown are set to reopen at whatever market price is prevailing at the time the platform comes back online. Ostium has framed the restart as contingent on the last round of technical and security reviews being completed.

What the attacker took

According to Ostium, the loss was limited to the liquidity provider vault. The company said 23,752,746 USDC was drained, while trader margin and open positions were not stolen and remain on the platform in a frozen state.

Ostium operates a decentralized perpetuals exchange on Arbitrum. It allows users to place leveraged trades from self-custody wallets across crypto, equities, metals, commodities, and foreign exchange markets, with settlement in USDC.

How the exploit worked

The company said the incident did not stem from a smart-contract flaw. Instead, the attacker allegedly abused Ostium’s signed-prices system by using two legitimate credentials: an authorized oracle-signer key and a registered PriceUpKeep forwarder.

With those credentials, the attacker was able to submit signed prices dated in the future, then repeatedly open and close positions at manipulated values. Ostium cited one example involving Bitcoin: a position was opened using a false price of $5,000 and later closed near the actual market level of around $60,000.

After the exploit, the stolen USDC was swapped into ETH and moved to Tornado Cash, according to the company’s account of the incident.

Losses fall on liquidity providers

Ostium said trader margin was unaffected, but liquidity providers absorbed the losses from the vault drain. The company has not yet provided detailed terms for compensation, though it said it is working on a path toward restitution.

The platform’s relaunch plan comes against the backdrop of a fast-growing business. Ostium raised a $20 million Series A in December 2025 in a round co-led by General Catalyst and Jump. The immediate focus, however, is on restoring operations and setting out how affected liquidity providers will be made whole after the exploit.

Source: Cryptopolitan