Hacker of $6.7M TrustedVolumes Theft Launders $278K

Blockchain security firm QuillAudits analyzed the attack and found that the hacker exploited a design flaw in TrustedVolumes’ custom Request-for-Quote (RFQ) proxy system. TrustedVolumes operates as a 1inch market maker and resolver, providing on-chain liquidity through this RFQ model.

How the RFQ System Was Supposed to Work

In an RFQ model, a maker pre-signs orders quoting a specific price for a token pair. A taker presents that signed quote to the settlement contract, which verifies the signature and executes the swap atomically. The system relies on three guarantees:

• The maker must authorize who can sign orders on its behalf.
• Each signed order must be filled only once (replay protection).
• The token source for the fill must be the authenticated maker’s own inventory, not an arbitrary third-party address.

Where All Three Guarantees Broke

QuillAudits stated that in the TrustedVolumes implementation, all three guarantees failed simultaneously. The attacker crafted a single composed transaction that bypassed authorization checks, replayed a valid signature, and sourced tokens from an address not belonging to the maker. That allowed the hacker to drain $6.7 million in a single transaction.

The exploit highlights the risk of custom settlement logic that deviates from standard, audited patterns. TrustedVolumes’ RFQ proxy was not a standard 1inch contract but a bespoke implementation, which introduced vulnerabilities that a routine audit might have missed.

What Would Reduce the Contagion Risk

• Fund recovery through negotiation: If TrustedVolumes successfully negotiates a bug bounty, a portion of the funds could be returned, reducing the immediate loss and restoring some confidence.
• Freezing of funds by exchanges or mixers: If the hacker attempts to cash out through centralized exchanges, those platforms could freeze the assets upon detection. TornadoCash is a mixer that obfuscates origin, and THORChain is decentralized, making freezing difficult.
• Improved security audits: TrustedVolumes and similar RFQ-based liquidity providers may now re-audit their custom contracts, reducing the chance of copycat exploits.

What Would Make the Situation Worse

• Accelerated laundering: If the hacker moves the remaining $6.4 million quickly through multiple chains and privacy tools, recovery becomes nearly impossible. The use of THORChain to swap into Bitcoin already complicates tracing.
• Copycat attacks on other RFQ platforms: The exploit method could be replicated against other market makers using custom settlement contracts. QuillAudits’ disclosure of the three simultaneous failures provides a blueprint for attackers to test similar systems.
• Loss of user confidence: TrustedVolumes’ role as a 1inch market maker means its liquidity is used by aggregators. If users perceive that RFQ-based liquidity is vulnerable, they may withdraw from pools or demand higher spreads, reducing market efficiency.

The TrustedVolumes exploit is a case study in how a single design flaw can cascade into a full drain when multiple security assumptions fail at once. The hacker’s laundering activity shows a methodical approach, mixing small amounts through TornadoCash and bridging larger sums to Bitcoin. For traders and liquidity providers, the immediate risk is not just the lost funds but the potential for similar exploits on platforms that have built custom settlement logic without rigorous, multi-audit review. The next concrete marker is whether TrustedVolumes can negotiate a partial return before the remaining funds disappear into privacy tools. For broader context on crypto security risks, see crypto market analysis.