Payy’s RollupV1 bridge processed a malicious verifyRollup batch containing an unauthorized 1,828,589.378132 USDC withdrawal to the attacker alongside ordinary withdrawals. The batch was submitted using Payy’s prover and validator infrastructure. ExVul reports that the malicious withdrawal had an all-zero burn hash that users cannot normally generate through Payy’s public circuits, indicating that the forged withdrawal entered during proving or aggregation rather than through an ordinary user withdrawal. Payy has confirmed the bridge exploit but has not yet established whether the cause was compromised prover/validator credentials or a proof-aggregation verification flaw

Payy’s Ethereum bridge contract was exploited and fully drained, with about 1,832,149 USDC leaving the contract. Payy said the stolen funds were users’ non-custodial deposits to Payy Network / Payy Wallet, paused all transactions, and said it is working on fund retrieval and a root-cause analysis.