Osmosis Proposes Using the Community Pool and Seized Assets to Restore the allBTC Peg

According to ME News, on September 10 (UTC+8), the Osmosis community proposed a plan to restore the peg of Alloyed BTC (allBTC) and protect user interests by approving future software upgrades to seize stolen assets from attacker addresses and utilizing the Osmosis community pool’s BTC holdings to absorb the remaining unpegged nBTC. Previously, on June 25, 2026, the Nomic cross-chain bridge minted 40.65 nBTC backed by BTC on Osmosis. This incident was exposed after being concealed for 74 days when Nomic suspended operations on September 7, resulting in a total BTC shortfall of 39.84 BTC. Approximately 22.65 BTC have been frozen in the attacker’s address via an emergency upgrade v31.1.0, while the remaining ~18 BTC were laundered through Tornado Cash and cannot be directly recovered. The proposed actions include: intercepting liquidity conversion from USDC.noble to allUSDC, releasing the community pool’s BTC holdings—approximately 7.75 BTC—to fund re-pegging; allocating ~12.48 BTC from the community pool’s allBTC reserves to the Liquidity subDAO to cover the shortfall; approving the transfer of the 22.65 frozen allBTC from the attacker’s address to the Liquidity subDAO for re-pegging purposes; marking nBTC as corrupted in the allBTC converter and initiating its withdrawal and destruction; and restoring allBTC deposit and withdrawal functions on Osmosis once the balance reaches zero and nBTC is removed from the asset portfolio. (Source: Foresight News)