$20M of Treasury Funds Lost in BonkDAO Governance Blunder

BonkDAO, stewards of Solana’s favorite memecoin, has lost over $20M from its treasury after an opportunistic attacker took advantage of decentralized governance.

While BonkDAO has commenced legal action against the “attacker”, market participants have argued that the exploit is simply another example of DAO governance “functioning as intended”.

Despite plummeting 8%, the Solana community has rallied around $BONK, a lore-rich coin that once breathed new life into the chain and pulled Solana out of its darkest days. 

Opportunistic Attacker Sends Themself $20M $BonkDAO Treasury

On June 30, a malicious actor began a calculated governance attack on the BonkDAO treasury, resulting in the unexpected transfer of ~$21M in funds on July.

After acquiring enough $BONK to float a new governance proposal, the attacker floated BIP-76, a proposal that would transfer 4.4T $BONK to their own wallet if passed. 

Unfortunately for BonkDAO, inactivity and voter apathy meant that BIP-76 went through completely unchallenged, with 99% of votes supporting the malicious proposal. Funds have since been moved to a separate holding wallet.

While at first glance the complete siphoning of the BonkDAO treasury funds looks like a hack or exploit, commentators have argued that this is nothing more than a clumsy governance blunder. 

BonkDAO Seeks Legal Action

Devoid of its treasury, BonkDAO is now actively taking legal action against the attacker. According to onchain data, the wallets used to both create the proposal and receive 4T $BONK were originally funded from ByBit, meaning that the exchange should have some KYC-verified information regarding the attacker’s identity.

However, while BonkDAO looks towards the firm arm of the law, market participants are unconvinced whether the attack was in any way illegal.

However, there may be a glimmer of hope for aggrieved $BONK holders and DAO supporters. Onchain analyst Tay argues that yesterday’s governance attack could be constituted as Wire Fraud under 18 U.S.C. § 1343. BIP-76 outlined that the exploiter’s intention was to cover the attack by promising to “stop the bleeding”, “rebuild”, and “install new members”. These could be construed as ‘false promises’ to defraud people out of their funds, perhaps giving BonkDAO an argument in the court of law.

Community Divided as $BONK Tumbles 8%

Optics, governance flaws, and voter apathy aside, the Solana community has lamented the attack against one of its favorite cultural icons. While the new cohort of Solana’s onchain traders know Bonk primarily as the branding behind its launchpad, bonk.fun, OGs remember $BONK much more fondly.

Quietly to tens of thousands of wallets on Christmas Day, 2022, $BONK quickly became Solana’s most iconic memecoin. From the ashes of the FTX collapse, $BONK became a Solana success story when the rest of the industry was criticizing the network for outages and for only having 75 devs.

With its runway effectively evaporating overnight with no guarantee of its return, $BONK has dropped ~8%, currently trading hands at a market capitalization of $375M

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