$41M Solana Vanishes in SwissBorg Hack: Kiln Staking Breach Exposed

Understanding the Solana Theft and SwissBorg’s Response Measures

The cryptocurrency market was rattled this week after Swiss-based investment platform SwissBorg confirmed a major Solana (SOL) theft on September 8, 2025. The company reported that approximately 192,600 SOL tokens, valued at $41 million, were stolen after attackers exploited a vulnerability in its staking partner Kiln’s system.

While the incident is one of the largest thefts involving Solana this year, SwissBorg was quick to reassure its users. The company stressed that the breach did not impact the SwissBorg app or its other Earn programs, with the attack isolated to a single API connection used within the SOL staking service.

What Happened: A Breakdown of the Hack

According to SwissBorg, the theft was traced back to an external DeFi wallet managed by Kiln, the company’s third-party staking partner. Hackers managed to infiltrate the API connection used in the SOL earn program, which lets customers deposit tokens to earn staking rewards.

On-chain data shows that the stolen funds were quickly moved into a wallet now tagged as the “SwissBorg Exploiter.” Early analysis suggests that hackers leveraged sophisticated tools to bypass security checks, highlighting the growing sophistication of cyberattacks targeting digital asset platforms.

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The scope of the incident is limited compared to SwissBorg’s overall operations. Less than 1% of its users were directly affected, and the stolen assets amount to about 2% of SwissBorg’s total reserves. Still, the size of the theft underscores the risks tied to third-party providers and the vulnerabilities inherent in crypto infrastructure.

Company Response: Covering User Losses

SwissBorg’s CEO, Cyrus Fazel, sought to calm nerves in a public statement. “It was a bad day, but not a fatal blow,” Fazel said. The company announced it would cover all user losses using its own SOL treasury, ensuring customers do not bear the financial burden of the attack.

Redemptions for the SOL earn program have been temporarily closed, but SwissBorg confirmed that other Earn strategies and platform operations remain unaffected. This decisive move, analysts say, demonstrates SwissBorg’s commitment to user protection and its willingness to take accountability despite the breach originating from an external partner.

At the same time, SwissBorg has launched an investigation with white-hat hackers, cybersecurity firms, law enforcement agencies, and exchanges to trace the stolen funds and potentially recover them. Such collaborations are becoming increasingly common as the crypto industry faces a surge in attacks targeting cross-chain bridges, DeFi platforms, and custodial providers.

Third-Party Risks in the Spotlight

The Solana theft is not an isolated case. On the same day as the SwissBorg incident, cybersecurity researchers revealed a supply chain attack on NPM software libraries, widely used by blockchain developers to build decentralized applications. Hackers injected malicious code into trusted open-source libraries, enabling them to infiltrate projects through software dependencies.

These types of third-party vulnerabilities are becoming one of the most dangerous threats in crypto. Attackers are no longer only targeting exchanges or wallets directly; instead, they exploit the “weakest link” in a complex ecosystem of service providers, partners, and tools.

Over the past two years, a string of major crypto hacks has exploited similar weak points. These include:

• The Venus Protocol phishing attack

• The Lykke exchange exploit

• The BigOne Exchange breach

• Malware campaigns like NimDoor

In each case, attackers leveraged integration points and third-party dependencies as the entryway.

Why Solana Is a Target

The fact that this theft involved Solana is notable. The Solana blockchain has grown rapidly to become one of the top ecosystems for decentralized finance (DeFi), NFTs, and high-speed transactions. Its fast transaction throughput and low fees have made it a favorite for staking services and retail investors.

However, this popularity also makes Solana-based services a lucrative target for hackers. With billions of dollars in total value locked across Solana’s DeFi ecosystem, even a small vulnerability in partner services can expose significant sums.

The Growing Cost of Crypto Hacks

Blockchain security firm Chainalysis estimates that crypto hacks drained more than $2.1 billion from the industry in 2024 alone, much of it tied to DeFi vulnerabilities. While the figure marks a slight decline from the peak in 2022, when over $3 billion was stolen, the trend remains concerning.

Attacks like the SwissBorg theft highlight not only the financial cost but also the trust deficit they create in the digital asset ecosystem. For platforms like SwissBorg that aim to attract mainstream investors, trust and transparency are as critical as security infrastructure.

Experts Call for Stronger Safeguards

Industry experts say the SwissBorg case illustrates the urgent need for stricter due diligence on third-party providers. “You can outsource your services, but you cannot outsource responsibility,” said one European cybersecurity consultant.

Some proposed measures include:

• Mandatory real-time audits of staking and wallet APIs

• Broader use of multi-signature custody solutions

• Greater transparency around partnership agreements

• Increased investment in supply chain monitoring

As regulators around the world tighten oversight on crypto firms, failures in third-party risk management could also draw greater scrutiny from financial watchdogs.

Balancing Efficiency and Security

The irony, experts say, is that while third-party collaborations are essential for scaling Web3 projects, they also introduce systemic risks. Staking services, cross-chain bridges, and liquidity providers all serve as critical infrastructure in the decentralized economy. Removing them is not an option, but improving oversight is becoming essential.

“The question is not whether we can eliminate these risks entirely — we can’t,” one analyst told ABC News. “The question is whether companies are prepared to balance efficiency with stronger safeguards before the next big attack happens.”

The Road Ahead for SwissBorg

For now, SwissBorg’s swift response and willingness to cover user losses may help preserve customer confidence. But the incident raises broader questions about how platforms communicate risks, vet partners, and safeguard assets in an increasingly hostile cybersecurity landscape.

The company has promised a full security review and upgraded protocols to minimize the chance of similar breaches in the future. Whether those measures will be enough to restore long-term trust remains to be seen.

In the short term, however, SwissBorg’s handling of the crisis may stand as an example for other platforms facing similar challenges: take swift responsibility, protect users first, and ensure transparency in both the damage and the response.

Conclusion

The SwissBorg Solana theft is a reminder that in the digital asset world, security is only as strong as the weakest link. While blockchain technology promises decentralization and resilience, its ecosystem depends on a complex web of partners, APIs, and external providers that can become points of vulnerability.

As the industry continues to grow, the pressure will mount on companies like SwissBorg — and regulators worldwide — to implement stronger safeguards, demand greater accountability from partners, and set new standards for digital asset protection.

Until then, investors are left navigating a space where the promise of innovation comes hand-in-hand with significant risks.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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