The Sandbox has contained a cross-chain bridge security breach that allowed attackers to mint enormous quantities of unbacked SAND on Base and BNB Smart Chain, prompting major cryptocurrency exchanges to restrict transfers while investigators assessed the damage. Initial on-chain alerts on August 22 showed more than 500 million SAND had been created without corresponding collateral. The number rapidly increased as the attacker continued interacting with the affected contracts.
PeckShield subsequently identified approximately 14.9 billion SAND minted across two attacker-linked addresses, nearly five times SAND’s legitimate maximum supply of 3 billion tokens. Other security researchers recorded hundreds of additional transactions and produced considerably larger nominal estimates. Blockaid reported approximately $49 billion in face-value SAND had been minted across more than 400 transactions while the attack was active. Those enormous figures, however, do not represent $49 billion of actual losses. The unauthorized tokens had nowhere near sufficient liquidity to be sold at their nominal market price.
Compromised Bridge Permissions Enabled Unbacked Minting
The vulnerability affected The Sandbox’s cross-chain SAND infrastructure on Base and BNB Smart Chain rather than the canonical SAND token on Ethereum. According to security researchers, attackers gained control over permissions associated with SAND’s LayerZero-based Omnichain Fungible Token infrastructure. Blockaid said compromised delegate permissions involving an approveAndCall function enabled unauthorized creation of SAND without the Ethereum collateral normally required to back bridged tokens. Under normal operation, SAND moved onto another network through the bridge should correspond to legitimate SAND locked on Ethereum. The exploit instead allowed tokens to be generated on destination chains without matching collateral.
The Sandbox confirmed the bridge vulnerability later August 22 and said it had fully contained the incident. The company disabled bridging to and from Base and BNB Smart Chain, isolating the unauthorized tokens and preventing them from being redeemed through its official bridge. Crucially, The Sandbox said SAND held on Ethereum and Polygon was unaffected and that the legitimate SAND backing its cross-chain infrastructure remained secure.
Actual Economic Damage Far Below Nominal Minting
Despite billions of tokens being created, The Sandbox estimated the direct impact at less than 0.01% of SAND’s legitimate 3 billion-token supply. On-chain investigators estimated approximately 14.75 million legitimately backed SAND, worth around $675,000 at prevailing prices, ultimately left the bridge adapter. Approximately 79.7 ETH was also reportedly extracted. The difference illustrates why the headline minting figure should not be interpreted as the financial loss from the exploit. Creating billions of unbacked tokens does not give an attacker billions of dollars unless sufficient market liquidity exists to sell them.
South Korean exchanges reacted quickly. Upbit issued a caution notice concerning SAND, while Bithumb suspended deposits and withdrawals as the scope of the incident became clearer. The Sandbox has warned users against buying, selling or providing liquidity for SAND on Base and BNB Smart Chain while those deployments remain isolated. The company also plans to use a pre-attack snapshot to compensate eligible liquidity providers affected by the breach, although it has not disclosed a reimbursement timetable.
The incident represents another example of cross-chain infrastructure becoming an attack surface even when a project’s primary token contract remains uncompromised. For SAND holders, the distinction is critical: attackers gained the ability to create effectively unlimited unbacked representations on affected chains, but they did not inflate the legitimate Ethereum SAND supply by billions of tokens. With the bridge now disabled and the vulnerability contained, attention will turn to The Sandbox’s technical postmortem, the precise compromise of bridge permissions and how much real collateral ultimately escaped before the affected networks were isolated.