Osmosis froze 22.65 BTC after a flaw in Nomic's custom forwarding system enabled a double-spend that created false nBTC vouchers and left part of the allBTC Bitcoin basket without valid backing. The allBTC dashboard showed 110.57 allBTC outstanding and 39.84 nBTC in the basket at the reporting cutoff, placing 36.03% of the token's backing in question and leaving about 70.73 BTC-equivalent of other backing. Osmosis said neither its chain nor the Inter-Blockchain Communication protocol was compromised. Nomic and allBTC deposits and withdrawals are frozen, while allBTC minting and redemption remain paused. On-chain researcher Rarma traced principal minting activity to June 25 and reported that 22.65060846 allBTC created during July 17 activity remained unmoved when the analysis was published. Osmosis plans to seek governance approval to confiscate the frozen Bitcoin and use community-pool Bitcoin to cover the remaining shortfall. Recovering the full frozen amount would still leave an estimated 17.19 BTC gap. No related seizure or recapitalization proposal appeared among the latest 20 on-chain proposals as of September 9.