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Ahmed Barakat
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Ripple news: Squid Crypto closed a $6 million investment led by North Island Ventures and Ripple on May 25, 2026, and within 24 hours, the challenger withdrew $3 million from the protocol.
This success involved a third-party pooling of funds with Squid’s cross-chain swap infrastructure, rather than liquidated contracts.
Squid’s response has been to distance itself from the breach entirely, saying that the team doesn’t know who sent a particular part of the leak.
Squid works as a meta-DEX and chain-abstraction protocol, it runs integrated transactions on multiple networks through integrated liquidity pools.
A $6M upgrade was earmarked as a catalyst for increased efficiency, and Ripple’s participation designed as a means of communication with its communication and payment systems. This story fell into just one story.
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Ripple News: How Squid Crypto Exploit Worked: Third Module Threat
The problem was part of the investment that Squid had recently put together to support the on-chain exchange, a part that sits outside the scope of the monitoring agreement.
The attacker used tricked-out tree feeds or malicious access permissions within the domain to directly compromise assets, bypassing the security controls that govern Squid’s contracts.
This is a standard approach that has appeared over and over again throughout the history of DeFi: calculations include the components that have been sent, not the entire trust value.
The theme in question was a third-party layer, meaning that its dependencies, permission concepts, and oracle dependencies were not handled in the same way as Squid’s code.
Squid Router’s ResponseSquid Router quickly issued a message isolating itself from the incident. The group explained that the leaked funds came from a third-party Gnosis Safe called
SquidRouterModule, which is not built, shipped, or controlled by them. They stressed that their main router connection was still intact and that all Squid users and their partners were safe.
The team noted that this feature integrated Squid with other protocols without directly affecting Squid, and urged the community not to confuse the two due to similar names. Nothing was needed for Squid users.
