Osmosis suspended key operations for alloyed BTC (allBTC) on September 9 after an exploit in Nomic’s custom forwarding mechanism enabled an attacker to double-spend nBTC and send fraudulent vouchers through IBC. The incident compromised approximately 39.84 nBTC, representing about 36% of allBTC’s backing and roughly 30% of Osmosis’s total BTC exposure. Osmosis said its own systems and the IBC protocol were not breached. An emergency upgrade froze 22.65 BTC in an address linked to the attacker, while BTC trading in existing liquidity pools continued. Osmosis plans to seek governance approval to seize the frozen funds and use the community pool to cover the remaining shortfall and restore allBTC’s 1:1 backing. Minting and redemptions remain suspended pending a recovery plan and further action.