TrustedVolumes, a liquidity resolver used by multiple decentralized finance protocols, lost approximately $6.7 million on May 7 after an attacker exploited a vulnerability in its custom request-for-quote swap proxy contract. The hack has raised immediate questions about the security practices of shared infrastructure providers in DeFi – the often-invisible layer of liquidity routing that sits between users and the protocols they interact with.
Blockchain analytics firm Blockaid identified the exploited contract as TrustedVolumes’ resolver on Ethereum and flagged the attacker’s address as the same operator behind the March 2025 incident involving 1inch Fusion V1 – indicating a sophisticated actor with a demonstrated pattern of targeting resolver-layer vulnerabilities.
What Was Stolen and How
Blockaid’s exploit detection system confirmed that the attacker extracted approximately 1,291 WETH, 206,282 USDT, 16.93 WBTC, and 1.26 million USDC from TrustedVolumes’ resolver contract. At prevailing prices at the time of the exploit, the combined total of those assets came to roughly $6.7 million.
TrustedVolumes confirmed the breach in a post on X, sharing three wallet addresses currently holding the stolen funds: one holding approximately $3 million, a second holding approximately $3 million, and a third holding around $700,000.
The firm said it was “open to constructive communication regarding a bug bounty and a mutually acceptable resolution” – a common post-exploit signal that the team is attempting a negotiated return of funds rather than purely pursuing law enforcement channels.
Stolen funds were routed through ChangeNow, a no-KYC cryptocurrency exchange, before being swapped into ETH, according to Hakan Unal, senior security operations lead at crypto security firm Cyvers.
The Technical Root Cause
Unal explained to Decrypt the specific flaw chain that allowed the attack to succeed. The vulnerability involved three compounding weaknesses in the TrustedVolumes resolver contract.
First, the contract allowed permissionless signer registration – meaning anyone could register themselves as a trusted signer without verification or gating. Second, the replay protection mechanism was broken, allowing the attacker to reuse authorization signatures across multiple transactions. Third, a transfer source field in the contract wasn’t validated, meaning the contract would accept instructions from an unintended source.
Together, these flaws let the attacker register as a trusted signer, generate authorizations that the broken replay protection failed to invalidate, and route those authorizations to drain victim balances without any valid underlying agreement. In a properly designed RFQ system, a signer authorization is only valid for a single transaction between specific counterparties – the TrustedVolumes implementation failed to enforce those constraints.
“The damage could have been larger,” Unal told Decrypt, noting that the attacker appeared to limit their scope to the funds they could route through ChangeNow in a single operation.
1inch Denies Exposure
One of the most significant aspects of the TrustedVolumes incident is its potential blast radius. TrustedVolumes is a liquidity resolver integrated with multiple protocols, including 1inch’s routing infrastructure. Following the exploit, 1inch moved quickly to distance itself from the incident.
The exchange published a statement asserting that its “systems, infrastructure or user funds” were unaffected by the TrustedVolumes hack. 1inch’s Fusion V2 architecture – the current version – wasn’t involved, according to the team. The attacker used a different vulnerability in TrustedVolumes’ own contract, not in 1inch’s protocol itself.
That distinction matters for user confidence. 1inch processes hundreds of millions of dollars in daily volume across Ethereum and other chains. If its resolver infrastructure had been implicated, the reputational and financial fallout would have been significantly larger.
The Pattern: Resolver Vulnerabilities Are Becoming a Target
The involvement of an attacker linked to the March 2025 1inch Fusion V1 incident points to a broader pattern. The resolver layer – a relatively technical and under-scrutinized component of the DeFi stack – is becoming a systematic target.
Resolvers in the context of DeFi order routing are intermediary contracts that match and fulfill swap quotes. They sit between aggregators like 1inch and the underlying liquidity pools on Uniswap, Curve, or other venues. Because they handle custody of funds in transit, even briefly, a vulnerability in a resolver contract can expose significant value.
The 2025 1inch Fusion V1 incident involved a different technical flaw but the same basic attack surface: a resolver whose authorization logic failed to adequately verify the legitimacy of signing parties. The fact that the same attacker returned to the resolver layer a year later, targeting a different implementation with a different bug, suggests a deliberate focus on this specific class of infrastructure.
DeFi’s 2026 Security Reckoning
TrustedVolumes isn’t an isolated case. The $292 million Kelp DAO exploit in late April – the largest single DeFi hack of 2026 – involved a liquid restaking protocol whose smart contract collateral-valuation logic was manipulated by an attacker. The $4.5 million Wasabi Protocol hack, reported April 30, involved an admin key compromise that allowed an attacker to drain protocol-controlled funds.
According to TRM Labs, North Korea-linked hacking groups have stolen 76% of all crypto hack losses in 2026 through just two attacks – a concentration of destructive capability that speaks to the sophistication of state-level actors targeting the system.
The cumulative picture in 2026 is one of DeFi facing its most sustained security stress test since the summer 2021 exploit season. The stakes are higher because institutional capital has moved into the system: Apollo Global Management, BlackRock, and numerous hedge funds now have on-chain exposure. A single catastrophic hack at the infrastructure layer could trigger the kind of institutional exodus that sets DeFi adoption back by years.
Industry security firms are responding. Blockaid’s real-time exploit detection flagged the TrustedVolumes attack within minutes of the first malicious transaction – though detection after the fact doesn’t recover stolen funds. Cyvers and similar firms are pushing protocol teams to adopt pre-transaction simulation and simulation-based alerting that can catch unauthorized fund flows before they execute.
TrustedVolumes hasn’t published a formal post-mortem as of this writing. The team’s offer of a bug bounty negotiation is standard practice but offers no guarantee of fund recovery; most exploit-recovery negotiations fail when attacker addresses are successfully laundered through no-KYC venues.
FAQ
what’s TrustedVolumes? TrustedVolumes is a DeFi liquidity resolver – a contract that handles price quotes and token swaps between market makers and protocols. It was integrated with multiple DeFi protocols including 1inch as a routing intermediary.
Was 1inch affected by the TrustedVolumes hack? 1inch denied any exposure, stating its systems, infrastructure, and user funds were unaffected. The exploit targeted TrustedVolumes’ own resolver contract, not 1inch’s Fusion V2 protocol.
What caused the TrustedVolumes exploit? Security researchers identified a combination of permissionless signer registration, broken replay protection, and an unvalidated transfer source field. Together, these allowed the attacker to forge authorizations and drain funds without valid underlying swap agreements.
*Sources: Decrypt, Blockaid, Cyvers (Hakan Unal), TrustedVolumes (X/Twitter), CryptoNewsZ, NewsbtC, The420.in, CoinDesk.*
