The Bitwise NEAR ETF (NRR) faced an immediate test of investor conviction just days after its market debut, as the native NEAR token fell approximately 10% to $4.86 following a $3.8 million security exploit on ecosystem protocol NEAR Intents.
The selloff occurred less than 48 hours after Bitwise made the asset accessible to traditional Wall Street investors via NYSE Arca on Sept. 29. According to SoSoValue data, the NRR fund generated $35.5 million in net inflows on its first day of trading. By Sept. 30, total cumulative inflows surpassed $50 million, bringing total net assets to $52.8 million—representing roughly 0.76% of NEAR's total market capitalization.
$3.8M Contract Vulnerability Halts Protocol Operations
NEAR Intents temporarily suspended services after discovering a software bug between its Omni infrastructure and its smart contract. A flow map published by ZachXBT and TRM traced approximately 3.87 million USDC moving through multiple intermediate wallets before reaching crypto exchange KuCoin.
NEAR co-founder Illia Polosukhin clarified that the exploit was isolated to USDT on the Binance Smart Chain (BSC). The project's SHIELD security monitor flagged abnormal activity, allowing developers to patch the vulnerability within one hour. NEAR Protocol confirmed that the underlying layer-1 network experienced no downtime, with block production and transaction processing remaining fully operational throughout the event. NEAR Intents committed to making affected users whole.
Polosukhin noted that NEAR Intents handles more than $4 billion in monthly transaction and payment volume across chains like BSC, Polygon, TON, Optimism, Avalanche, Stellar, and Scroll. Addressing the breach, Polosukhin pointed out that cybercriminals equipped with artificial intelligence are aggressively targeting crypto projects, referencing recent attacks against BitGet, Lido, and the MetaMask infrastructure breach.
Derivatives Unwind Preceded ETF Launch
Data from Santiment shows that speculative leverage had already begun unwinding prior to the debut of NRR. NEAR-denominated futures open interest peaked at 215 million NEAR on Sept. 21 before declining 21% to 169 million NEAR on Sept. 29, even as the token's price surged 86% from Sept. 16. Dollar-denominated open interest touched $1 billion on Sept. 27 before pulling back.
Key details from the incident include:
- Bitwise's NRR ETF accumulated over $50 million in net inflows across its first two trading sessions.
- The NEAR Intents exploit resulted in a preliminary loss of $3.8 million isolated to USDT on BSC.
- Base-layer NEAR Protocol consensus remained entirely unaffected, avoiding core operational disruption.
Why It Matters
This incident highlights the operational disconnect between institutional wrappers and decentralized application security. While Bitwise shareholders hold exposure to the underlying NEAR token rather than application-layer smart contracts, market sentiment remains tied to the security of core ecosystem infrastructure like NEAR Intents. How institutional inflows respond to this initial stress test will reveal whether traditional investors view application vulnerabilities as isolated events or as structural risks to the broader layer-1 ecosystem.
