SwapNet Exploit Drains $16.8M After Approval Flaw on Matcha Meta

In Brief

• SwapNet exploit drains $16.8M after users disabled one-time approval protections.
• Attacker swapped $10.5M USDC to ETH on Base before bridging to Ethereum.
• Matcha Meta disables affected contracts as security firms flag wider DeFi risks.

A security breach linked to SwapNet led to losses of about $16.8 million, affecting users interacting through Matcha Meta. The incident mainly impacted users who disabled one-time approvals, thereby exposing persistent token permissions.

Blockchain security firm PeckShieldAlert identified the exploit and traced the initial fund movements. The attacker targeted SwapNet router contracts that retained unlimited approvals from affected user wallets.

On the Base network, the attacker exchanged roughly $10.5 million in USDC for about 3,655 ether. Soon after, the attacker began bridging the converted assets to the Ethereum mainnet to complicate tracking.

SwapNet operates as a liquidity router used by Matcha Meta to source pricing and deep liquidity. The exploit involved abusing existing approvals rather than breaching private keys or core infrastructure.

Matcha Meta, built by the 0x team, confirmed the issue and immediately disabled affected SwapNet contracts. The platform also removed the option allowing users to grant direct approvals to third-party aggregators.

Investigation Expands as Security Firms Flag Wider Risks

Further analysis suggested the exploit stemmed from an arbitrary call vulnerability within SwapNet contracts. This flaw allowed attackers to transfer approved tokens without requesting new permissions.

Security firm BlockSec reported that multiple contracts across chains suffered losses exceeding $17 million. Affected networks included Ethereum, Arbitrum, Base, and BNB Chain, increasing the incident’s scope.

Separately, CertiK estimated that stolen funds near $13.3 million in USDC from related activity.
Some contracts involved remained closed-source and unverified at deployment.

Matcha Meta later confirmed that 0x core contracts were not affected by the incident.
Users relying on one-time approvals through 0x infrastructure remained unaffected.

The incident renewed scrutiny around persistent token approvals in decentralized finance.
Unlimited permissions offer convenience but increase exposure during smart contract failures.

Meanwhile, on-chain investigator ZachXBT criticized Circle’s delayed response to freeze remaining USDC. Roughly $3 million reportedly remained at addresses eligible for freezing during the response window.

The breach adds to a growing list of DeFi security failures early in 2026. Industry data shows stolen crypto funds reached record levels in recent years, increasing pressure on protocol security practices.