Bitcoin fund lost 36% backing due to unnoticed software bug for 74 days

A software flaw in Nomic's system allowed an attacker to mint 39.84 unbacked nBTC, creating a 36% deficit in the backing of Osmosis's Alloyed BTC fund. This exploit, which occurred on June 25, went unnoticed for 74 days until Osmosis discovered it and froze related deposits and withdrawals. Osmosis has locked 22.65 BTC from the attacker's wallet and plans to propose governance actions to seize these assets and restore full backing of Alloyed BTC. The incident highlights risks in BTC tokens minted on other blockchains relying on custom code.