Incident Overview
On May 20, 2026, the P2P decentralized exchange RetoSwap was exploited for approximately 7,000 XMR (~$2.7M) due to a critical vulnerability in its upstream Haveno trading protocol. The attack allowed a malicious actor to impersonate an arbitrator, enabling them to hijack multisig wallet creation before funds were deposited.
The exploit relied on a flaw in how the Haveno trade protocol handled message synchronization during the initial trade setup. When an attacker initiated a trade, they sent a fraudulent, out-of-order acknowledgment (ACK) message to the victim, effectively impersonating the platform's arbitrator.
This spoofed message tricked the trading software into updating the arbitrator's node address to one controlled by the attacker. By controlling this address, the attacker was able to position themselves as a participant in the multisig wallet creation process. This allowed them to construct a compromised multisig wallet, which they subsequently drained once the victim deposited their funds. The incident primarily impacted large-scale crypto-to-crypto offers, while fiat-based trading remained unaffected.
Incident Report
Protocol Information
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to RetoSwap, these are the critical security checks that could have prevented this incident (May 2026).
- Verify all logic paths related to Other / Missing Input Validation are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
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