Payy, a privacy-focused stablecoin payments platform, has shut down its network after its Ethereum bridge contract was exploited early on September 24, 2026. The company said the contract lost its full balance. For users, the result is that funds cannot be moved or spent right now. Deposits, withdrawals, transfers, and card purchases are all frozen while the investigation continues.
Payy’s own statement gave no dollar figure. On-chain analysts have filled in part of that gap. A transaction recorded at Ethereum block 26044909 at 4:21:23 a.m. UTC shows 1,832,149.4681 USDC leaving a Payy rollup contract. Payy has not confirmed that transaction or its size, so the figure should be treated as preliminary.
Attackers who drain bridges usually move quickly to hide the money, and early tracing suggests that happened here too. Payy says it is working on fund recovery and on finding the technical root cause. It has not given a timeline for restoring service or said how affected users will be compensated.
What Payy Has Confirmed
Payy’s public incident notice was brief. The company said “Payy’s bridge contract on Ethereum was exploited and drained of its full balance,” and added that it is following established incident-response procedures.
Payy later clarified that the stolen assets were users’ non-custodial deposits tied to Payy Network and Payy Wallet. That detail matters. Non-custodial usually means users control their own keys and are not handing assets to a company to hold. However, deposits routed through a bridge still sit in a smart contract, and a flaw in that contract can expose them.
Services currently suspended
| Service | Status as of Sept. 24 disclosure |
|---|---|
| Deposits | Paused |
| Withdrawals | Paused |
| Transfers | Paused |
| Card transactions | Paused |
| Payy Wallet functions | Paused |
Because the card is included, the disruption reaches past stablecoin transfers into everyday purchases made through the app. Payy has not said how many users held active balances or tried to pay during the outage.
Law enforcement and industry notified
Payy says it has shared attacker-linked addresses with law enforcement, cryptocurrency exchanges, and blockchain analytics firms. It is also working with several incident-response organizations to trace the funds. The goal is to stop the assets from being cashed out through centralized exchanges or laundered through privacy services.
What On-Chain Investigators Are Reporting
The following details come from independent analysts, not from Payy. The company has not verified them.
How the funds left the contract
According to on-chain reports, the attack started with a transaction that called Payy’s verifyRollup function and removed 1,832,149 USDC from the bridge contract, with nearly all of it going to a single address. Payy runs on an Ethereum-based rollup, and the rollup contract works as the link between activity on Payy’s network and final settlement on Ethereum mainnet.
Security firm ExVul gave a slightly different figure. It estimated about 1,828,589 USDC, roughly 95% of the bridge’s USDC, and said the batch was submitted with Payy’s own prover key and signed by its own validator key. If confirmed, that would point toward compromised or misused privileged keys rather than a simple coding bug. Payy has not said which attack vector was involved.
Where the money went
Specter Investigation said it followed the stolen USDC through the Railgun privacy protocol, where it was swapped into about 683 ETH and split across multiple addresses. Routing funds through a privacy protocol makes tracing much harder and lowers the odds of a quick freeze by exchanges.
Open Questions
Several key facts are still unknown as of Payy’s initial disclosure:
- The exact root cause, whether a smart-contract flaw, stolen admin credentials, compromised signer keys, or faulty bridge validation
- The total amount lost across all assets, not just the reported USDC outflow
- Whether the vulnerable contract has been upgraded, disabled, or replaced
- When services will resume and how users will be made whole
- Who is responsible for the attack
Why bridges keep getting hit
Bridges tend to hold large pooled balances that back assets moving between chains. That concentration makes them attractive. Attackers who get past validation checks or tamper with withdrawal logic can mint tokens with no backing, push through forged cross-chain messages, or pull out locked collateral. Payy’s case is a reminder that self-custody protects against an exchange failing, but it does not remove smart-contract risk once funds enter a bridge.
What Payy Users Should Do Now
The safest step is to rely only on Payy’s official channels for updates and recovery instructions. Attackers frequently target confused users after a crypto incident with phishing sites, fake support accounts, and malicious wallet-connection requests. Be wary of any unsolicited message offering reimbursement, wallet migration, or fund recovery, and never share seed phrases or sign transactions you did not initiate.
Payy says it will publish more updates as its investigation moves forward.
