Balance Coin plunged 99% after a $915,000 attack on the 42DAO

Balance Coin (BLC), an algorithmic stablecoin designed to track the value of the U.S. dollar, plunged more than 99% in value after a blockchain security company reported an attack suspected to involve the 42DAO.

Summary

After security companies linked the collapse of Balance Coin to the attack on the 42DAO, the token's value evaporated by more than 99%. The attacker suspected of minting unsecured BLC and then exchanged the tokens for USDT and BTCB through the PancakeSwap pool. In two suspicious transactions on BNB Chain, approximately US$915,000 in funds were withdrawn, while Balance Coin quickly became unanchored. PeckShield said the incident caused approximately $915,000 in damage and linked the BLC collapse to an attack that affected 42DAO, a related decentralized organization in the Balance Protocol ecosystem. The security company said Balance Coin "has plunged 99%" after the suspected attack.

On July 22, 2026, the coin price fell from close to the target of US$1 to an all-time low of US$0.001209. As of the time of verification, CoinMarketCap showed that BLC was trading at approximately US$0.00247, down 99.75% in 24 hours. Its 24-hour price range ranges from $0.001209 to $0.9955.

Security firm traces suspected attack to two transactions

TenArmor reported detecting two suspicious transactions involving GemJoin and 42DAO on BNB Chain. On-chain data cited in the report showed that the first transaction minted approximately 4.5 million BLC from an empty address, and the tokens were subsequently transferred to PancakeSwap V2. The attacker then exchanged the newly minted BLC for Binance Anchoring USDT (also known as BSC-USD) and Binance Bitcoin (BTCB). About two hours later, a second transaction allegedly used the same method, minting an additional 5,900 BLC and withdrawing more assets from available liquidity. The minting reportedly increased the number of BLC tokens available for sale, while the normal control mechanisms that the agreement should have had were not in effect. As newly minted tokens enter the decentralized exchange pool, selling pushes BLC prices significantly away from their dollar targets. [TAG

PeckShield estimated the damage at approximately $915,000. However, the security firm described the incident based on its analysis of on-chain activity, and detailed post-event reports issued by 42DAO were not found in the latest public information reviewed for this report.

Balance Coin loses its U.S. dollar anchor

Balance Coin operates as the core stablecoin of the Balance Protocol ecosystem. CoinMarketCap describes BLC as an algorithmic stablecoin on BNB Chain designed to maintain a stable value against the U.S. dollar, while 42DAO describes the token as part of its broader financial ecosystem. The coin's collapse left it trading at a fraction of its target value. Although prices have rebounded from intraday lows, they were still more than 99% lower than before the suspected attack at the time of verification.

This incident is similar to other cases of unauthorized creation of tokens, which put sudden pressure on market liquidity. In March, Resolv's USR stablecoin broke anchor after attackers minted millions of unsecured tokens and redeemed them through the DeFi Marketplace. Resolv subsequently suspended protocol functionality and investigated the vulnerability.

Unauthorized minting remains a recurring attack method

Other encryption projects have also faced sharp price drops due to attackers creating tokens without authorization. In May, MAPO plunged 96% after attackers used a bridging vulnerability to create unauthorized tokens and sell them to decentralized exchange liquidity. In another case, Stake DAO was attacked in May, when the attacker allegedly minted trillions of vsdCRV tokens and subsequently exchanged them for ETH. These cases involve different technical weaknesses, but all allow attackers to create tokens outside the expected supply process.

For Balance Coin, the current focus remains on the suspected attack on the 42DAO and the state of the BLC after it has been almost completely unanchored. Existing on-chain reports point to two suspicious attack transactions.