The price of Midnight's native token NIGHT plunged 35% following a rapid transfer of 515.2 million NIGHT tokens across the Wanchain bridge associated with Cardano, sparking a significant market sell-off.
On July 20, 2026, within eight minutes, the Wanchain bridge contract, initially funded in December 2025, moved the large volume of NIGHT tokens in four tranches: 203 million, 129.6 million, 120.4 million, and 62.1 million NIGHT. other assets held by the contract such as Mynth, XER, and WMT remained untouched, indicating the transfer specifically targeted NIGHT tokens.
Blockchain analysis by Cardano community investigator UTxOMaestro revealed that the transferred NIGHT tokens consolidated into two wallets, W1 and W2, which likely belong to the same entity. Wallet 1 sent 1,000 ADA to Wallet 2 before transferring 200.06 million NIGHT tokens. Wallet 2 then returned 100.31 million NIGHT alongside ADA and USDCx, supporting the theory of common control.
Wallet 1 began selling tokens almost immediately, offloading approximately 300 million NIGHT on decentralized exchanges. Confirmed swaps included 217.7 million NIGHT converted for around 24 million ADA and another 87.88 million NIGHT swapped for roughly 1.44 million USDCx, driving initial price declines close to 50% before stabilizing near 35% losses.
Despite heavy selling, liquidation was incomplete. Wallet 1 transferred 200 million NIGHT back to Wallet 2, which sold only a fraction and deposited about 68.27 million NIGHT as collateral on the Liqwid lending protocol. Subsequently, Wallet 2 borrowed approximately 4.364 million ADA against the collateral and transferred this ADA back to Wallet 1, suggesting an attempt to use holdings rather than fully cash out.
The Midnight Foundation addressed community concerns, stating the Midnight blockchain itself was not breached. The incident was confined to the Wanchain Cardano-BNB bridge, clarifying no direct compromise of Midnight’s core infrastructure.
