New Market Trading: A Gnosis Safe Add-On With an Open Door Cost 88 Clients $3.8M

At 06:11 UTC on 25 May 2026, the first of 88 client wallets at New Market Trading was emptied. Thirty-four seconds later the thief was working through Ethereum as well. In under 15 minutes, according to the security firms QuillAudits and Common Prefix, the clients' savings had been swept out on three blockchains at once.

New Market Trading, or NMT, sold itself as a secure, hands-off "onchain wealth" service with real people on the support line. Its founder and chief executive, Frank Hepworth, also runs a YouTube channel on crypto strategy. Clients kept their money in their own wallets; NMT's software traded it for them. The loss is put at between $3.78 million (QuillAudits) and $3.98 million (Common Prefix), or about $3.8 million. Early alerts from Blockaid, which spotted the attack as it happened, said $3 million; the first press reports said $3.2 million from 86 wallets, before the full count across all three chains came in.

A vault, and a side door

The clients' wallets were Gnosis Safes. A Safe is one of the most widely used vault accounts in crypto: it can be set up so that several keys must sign before money moves, much like a company bank account that needs two directors to approve a payment. It holds billions of dollars for companies, funds and online communities.

A Safe can also be given add-ons, called modules. Switching one on is like signing a power of attorney: the module can move money without collecting the usual signatures. NMT built its own module so that its trading robot, which it called a delegate, could buy, sell and approve payments for clients around the clock. NMT gave the module a confusing name, SquidRouterModule, after Squid, an unrelated service that moves money between blockchains, and used Axelar, a messaging network that carries instructions between blockchains, to pass the robot's orders along.

Safe itself was not broken. Rahul Rumalla, chief executive of Safe Labs, said the core contracts were unaffected and that only wallets which had switched on this third-party module were hit.

How the door opened

The module was meant to obey only two parties: the Squid router and NMT's robot. It checked neither properly.

First, it asked who was sending the instruction, but it read the answer from a field the sender filled in themselves. Anyone who wrote the word for the Squid router in that field passed. It is the equivalent of a bank paying out on any letter whose letterhead says it came from the client's broker. Rekt, the crypto security publication, described it as a master password printed in the source code, which NMT had published for anyone to read on Basescan, the public record of the Base blockchain.

Second, it asked whether the named robot had permission to trade for that wallet. The robot really did have permission. But the module took the robot's name from the instruction too, and never checked that the robot was the one actually sending it. The robot's address was public. A third route, an "express" function inherited from Axelar's code for speedy delivery, carried no extra check at all.

So the thief could send instructions in the robot's name, and the module carried them out.

Selling everything to yourself

The attacker did not simply transfer the money out. Before touching a wallet, the attacker set up 19 trading pools on Uniswap, an automated exchange where anyone can open a market between two tokens, one for each type of token the clients held. Each pool paired a real token, such as USDC (a digital dollar), with a worthless token the attacker had made, called "u". The attacker was the only one who had put money into these pools.

Then, wallet by wallet, the attacker ordered each Safe to approve a payment and sell its whole balance into one of those pools, with the lowest acceptable price set at zero. It is like ordering a client's broker to sell all their shares at any price into a market where the only buyer is the thief. The clients ended up holding piles of "u". The real tokens sat in the pools, and the attacker withdrew them.

The attacker's first money, 2.1 ETH (Ethereum's own coin), came from Tornado Cash, a service that mixes deposits so the source cannot be traced, according to PeckShield. Using Relay, a service for moving money between blockchains, the proceeds were gathered on Ethereum and converted into DAI, another digital dollar. By the end of 25 May one wallet held 3,070,767 DAI. About 71 per cent of the losses were on Base, the blockchain run by Coinbase, 27 per cent on Ethereum and 2 per cent on Arbitrum.

Another 229 Safes had the module switched on but were not drained. The add-on had been live since late February 2026, so the door stood open for about three months. Burra Security had audited NMT's first version in October 2025, in a report kept private at NMT's request; it said this module was added later and was never part of its review.

Where the money is now

Squid spent the day denying a product it never made. Its co-founder, known as Fig, wrote on X: "We don't know yet who wrote or deployed this." Common Prefix later linked the module to NMT after NMT sent the attacker an on-chain message, a note attached to a blockchain transaction.

On 27 May, Hepworth said the funds belonged to clients and offered a "white hat" deal: return most of the money and keep a cut, with a written promise of no criminal or civil action. Rekt reported the terms as 90 per cent back by 30 May; QuillAudits described 80 per cent. The attacker never replied.

For more than four months the DAI did not move. Then, on 5 October 2026, the attacker's wallet sent a test payment of 1 DAI to a new, unused address and, 27 minutes later, the full 3,078,821 DAI, according to the public Ethereum record. As of 16 October 2026 the money sits there. No one has been named or charged, and NMT has published no post-mortem or repayment plan.