The Sandbox news

An attacker exploited a bridge configuration flaw in The Sandbox's SAND omnichain token on Base, hijacking LayerZero delegate permissions to mint 329.24 trillion unbacked SAND tokens over five hours on Aug. 21-22, 2026. Despite the $49 billion face value, the actual theft was limited to roughly 14.75 million SAND, worth about $675,000, drained from the Ethereum OFT Adapter in under 60 seconds. The Sandbox disabled bridging on Base and BNB Smart Chain, removed LayerZero peer settings, and confirmed Ethereum and Polygon SAND remained untouched. The project announced a 1:1 treasury-funded reimbursement for eligible holders, with no new tokens minted. The exploit, the third major LayerZero-related bridge failure in five months, accelerated a $15 billion migration to Chainlink CCIP.

The Sandbox will reimburse eligible SAND holders 1:1 after an August 21 bridge exploit drained about 14.7 million tokens, worth roughly $700,000, from an Ethereum vault. The compensation, funded from the treasury without minting new tokens, will cover legitimate bridged SAND on Base and BNB Smart Chain, with claims opening within two weeks. The attacker exploited a configuration flaw to gain sole verifier control of bridge contracts, minting over 339 trillion unbacked SAND. The compromised bridges will be permanently retired; SAND on Ethereum and Polygon was unaffected. The project will coordinate with two centralized exchanges, which hold over 72% of eligible balances, to distribute replacement tokens directly to customers.

Blockchain gaming platform The Sandbox has pledged 1:1 compensation to eligible SAND holders following an Aug. 21 bridge exploit that drained approximately 14.744 million SAND (worth about $700,000) from an Ethereum vault. The company stated that users who legitimately held bridged SAND on Base or BNB Smart Chain before the attack will receive equivalent Ethereum-based SAND, funded from its treasury without new token minting. The claims process is set to open within two weeks and remain open for two more weeks, with two central exchanges holding over 72% of eligible balances and handling direct distribution to affected customers. The post-mortem revealed the attacker exploited a configuration flaw in SAND's Base and BNB Chain contracts, becoming the sole verifier of incoming bridge messages and minting unbacked tokens. While over 339 trillion unbacked SAND was minted, those tokens have been isolated and cannot be bridged or redeemed. SAND on Ethereum and Polygon was unaffected, and the compromised bridge contracts will be permanently retired, with any future bridges using newly deployed contracts. SAND traded at approximately $0.04 at publication, down 10.4% over the previous seven days.

The Sandbox has contained a vulnerability in its SAND cross-chain bridge on Base and BNB Smart Chain after an attacker minted unbacked tokens on both networks. The project estimates the impact at less than 0.01% of total SAND supply, stating that tokens on Ethereum and Polygon are unaffected and no user wallets were compromised. Security firm Blockaid flagged the incident, noting attackers hijacked LayerZero delegate permissions via the approveAndCall function, with roughly $49 billion in face-value SAND minted across over 400 transactions. The team has disabled bridging to and from Base and BSC, isolating the minted supply and preventing movement or redemption, while SAND locked on Ethereum remains intact. Holders were advised to avoid trading SAND on the affected networks. South Korean exchanges Bithumb and Upbit suspended SAND deposits and withdrawals, citing suspected security incidents. The project is preparing a pre-incident snapshot and compensation for liquidity providers, with a full post-mortem promised.

An exploit targeting The Sandbox's SAND token on the Base network allowed attackers to mint billions of unauthorized tokens, with approximately $49 billion in face-value SAND created across over 400 transactions, according to security firm Blockaid. The attack hijacked LayerZero delegate permissions via approveAndCall, prompting the project to halt bridging on Base and BSC and advise users not to trade SAND on these networks. The Sandbox stated the vulnerability has been contained, affecting less than 0.01% of SAND's total supply, with Ethereum and Polygon deployments unaffected and user wallets uncompromised. The token's price dropped to $0.044 before rebounding to around $0.048. The team plans to issue a compensation plan for affected liquidity providers and a full incident report.

The FCA has chosen four firms, including Revolut, for a stable-coin sandbox that lets them test issuance in real-world conditions without regulatory penalties. Participants are Revolut, Monee Financial Technologies, ReStabilise and VVTX. The trial will focus on stable-coin issuance, with FCA specialists providing feedback to shape future UK rules. The sandbox comes as the UK finalises its stable-coin regulatory regime later this year and follows the U.S. GENIUS Act and a joint Transatlantic Taskforce aimed at harmonising crypto rules. Outcomes will directly influence the country’s approach to payments, wholesale settlement and crypto trading.

The UK's FCA has chosen four firms, including Revolut, to test fiat-pegged stablecoins in a regulatory sandbox. Of 20 applicants, Revolut, Monee Financial Technologies, ReStabilise and VVTX were selected. The sandbox aims to evaluate stablecoin products under real-world conditions while the FCA and Bank of England work on comprehensive rules. The move follows the Bank of England's plan to advance stablecoin development and the US GENIUS Act's pending implementation. The FCA says the trials will help shape clear, effective regulations that support responsible innovation, benefiting consumers and financial transactions.

The UK Financial Conduct Authority has selected Monee Financial Technologies, ReStabilise, Revolut and VVTX to pilot stablecoin services in its regulatory sandbox, focusing on issuance, payments, wholesale settlement and crypto trading to inform future rules that will take effect in 2027. Industry leaders, notably Coinbase CEO Brian Armstrong, have criticized the FCA’s cautious approach, arguing that proposed caps on stablecoin holdings could stifle innovation and make the UK less competitive in the digital‑economy space.

Episode 5 of Layer One, hosted by The Block’s Kelvin Sparks and Hypha founder Steven Gates, features Ava Labs General Counsel Lee Schneider and Plume General Counsel Salomon Benaei discussing how a new Senate bill could solidify crypto’s legal foundation, moving it from a “sand” to a “stone” footing. The panel covers key regulatory shifts, including token sales and legal structures, rights and disclosures for real‑world assets, buyer protections, pre‑IPO tokenized shares, governance token questions, the decentralization test debate, and how clarity will affect builders, traditional finance’s crypto play, and open versus closed networks.

Axie Infinity’s token jumped 89 % this week after a major tokenomics overhaul aimed at reviving its in‑game economy, while The Sandbox rose 15 %. The gains come amid a Bitcoin slide and global liquidity worries, but analysts say they stem from project‑specific news rather than a broader shift into gaming tokens. Some experts, like Bertie Wrench, view the rally as high‑risk speculation and capital rotation. Others, such as Illia Otychenko, argue the moves reflect localized catalysts from the recent restructuring. A lasting GameFi revival would require a deeper increase in token utility and user demand, which the sector still lacks.