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{"actor":"system:backfill","investigation_id":"ff5b8c40-6bb0-4ac6-b2c2-028a6b5eca0d","kind":"publish","page_slug":"abracadabra-money-mim-depeg-june-2026","published_at":"2026-06-29T12:09:59.951Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"Abracadabra Money MIM Depeg June 2026","sections":[{"content":"On June 15, 2026, MIM began trading at approximately $0.82, representing an 18% deviation from its $1.00 target peg. On June 18, Abracadabra announced a liquidity incentive program distributing 140 million SPELL tokens to liquidity providers in the MIM/Curve pool, but the measure failed to halt the slide. By June 24–25, 2026, MIM had collapsed to approximately $0.49–$0.50, with an intraday low of approximately $0.43. The 24-hour decline at the peak of the crisis was approximately 29.9%, and the 7-day decline reached 41.8%. Trading volumes spiked over 2,500% during the crash. At the time of the depeg, MIM's circulating supply was approximately 44–56 million tokens and its market capitalization had fallen to approximately $27.8 million. The broader crypto market was simultaneously under stress, with Bitcoin testing the $60,000 support level and cross-market liquidations exceeding $994 million.","heading":"The June 2026 Depeg Event","severity":"critical","sources":[{"credibility":2,"name":"MIM Plunges 36% as Abracadabra Launches Emergency Measures — Crypto Times","type":"news_article","url":"https://www.cryptotimes.io/2026/06/25/mim-plunges-36-as-abracadabra-launches-emergency-measures/"},{"credibility":2,"name":"Abracadabra raises interest rates as MIM stablecoin depeg worsens — Crypto Briefing","type":"news_article","url":"https://cryptobriefing.com/abracadabra-mim-stablecoin-depeg-interest-rates/"},{"credibility":2,"name":"Abracadabra raises rates as MIM falls 50% — Grafa","type":"news_article","url":"https://grafa.com/en/news/crypto/abracadabra-raises-rates-as-mim-falls-50"},{"credibility":2,"name":"MIM Depegs To $0.50 As Abracadabra Raises Cauldron Rates — Crypto Adventure","type":"news_article","url":"https://cryptoadventure.com/mim-depegs-to-0-50-as-abracadabra-raises-cauldron-rates/"}]},{"content":"On June 25, 2026, Abracadabra issued a public statement acknowledging the crisis: the protocol stated it was 'acutely aware of the MIM depeg' and was 'taking emergency actions to remedy the situation.' The response comprised three primary measures. First, interest rates were raised gradually across all Cauldron lending markets — including deprecated ones — to make outstanding borrowing more expensive and incentivize debt repayment, which would reduce circulating MIM supply. Second, direct incentive programs and Curve Finance bribe payments were suspended until MIM returned to its peg. Third, the protocol reasoned that MIM's discounted market price created a natural arbitrage incentive: borrowers could purchase MIM below face value on open markets and repay their loans at par, simultaneously capturing profit and permanently removing MIM from circulation. Earlier in June, the protocol had attempted a smaller intervention by injecting $100,000 of protocol-owned liquidity into a new Curve Finance pool on June 15, a measure that proved insufficient against the scale of liquidity outflows. By the time of article publication on June 25–26, MIM had partially recovered to approximately $0.95, though the situation remained fragile.","heading":"Emergency Response Measures","severity":"high","sources":[{"credibility":2,"name":"Abracadabra's MIM crisis deepens as dollar peg breaks again — crypto.news","type":"news_article","url":"https://crypto.news/abracadabras-mim-crisis-deepens-as-dollar-peg-breaks-again/"},{"credibility":2,"name":"Abracadabra Launches Emergency Plan After MIM Stablecoin Crashes — CoinPaper","type":"news_article","url":"https://coinpaper.com/32314/abracadabra-launches-emergency-plan-after-mim-stablecoin-crashes"},{"credibility":2,"name":"Abracadabra Raises Rates as MIM Depeg Deepens — CoinInsider","type":"news_article","url":"https://www.coininsider.com/news/abracadabra-raises-rates-as-mim-depeg-deepens/"}]},{"content":"Abracadabra Money was launched in May 2021 by Daniele Sestagalli (also known as Daniele Sesta), an anonymous co-founder known as 0xMerlin, and a second anonymous co-founder referred to as Squirrel. The protocol operates as an omnichain DeFi lending platform that allows users to deposit yield-bearing crypto assets as collateral in isolated lending markets called Cauldrons, in exchange for minting MIM, the protocol's USD-denominated stablecoin. SPELL is the protocol's governance token. MIM is an overcollateralized stablecoin — unlike algorithmic stablecoins, its supply is backed by crypto collateral — but its peg stability depends on sufficient liquidity depth in secondary markets, adequate collateral values, and active protocol governance to manage supply. MIM circulating supply at the time of the crisis was approximately 44–56 million tokens, representing a dramatic contraction from earlier peaks. The SPELL token's market capitalization had fallen to approximately $20.3 million by mid-2026, with a circulating supply of approximately 176.7 billion SPELL tokens at a price of approximately $0.000115.","heading":"Protocol Background and Mechanism","severity":"medium","sources":[{"credibility":2,"name":"Magic Internet Money (MIM): A Yield-Bearing Stablecoin — Gemini Cryptopedia","type":"other","url":"https://www.gemini.com/cryptopedia/magic-internet-money-mim-crypto-abracadabra-money"},{"credibility":2,"name":"Abracadabra Money Explained: A Guide to the DeFi Platform — BeInCrypto","type":"news_article","url":"https://beincrypto.com/learn/abracadabra-money-explained-a-guide-to-the-defi-platform/"},{"credibility":2,"name":"Spell Token price today, SPELL to USD — CoinMarketCap","type":"other","url":"https://coinmarketcap.com/currencies/spell-token/"}]},{"content":"The June 2026 depeg occurred against a backdrop of repeated security failures. In January 2024, a smart contract vulnerability in Cauldron V3 and V4 contracts allowed an attacker to exploit a loss-of-precision rounding error in debt accounting, draining approximately 2,740 ETH including 2.2 million MIM tokens for a total loss of approximately $6.4–$6.5 million. The incident caused a brief depeg. In March 2025, a second exploit targeting Cauldrons integrated with GMX liquidity pools used a flash loan attack to drain approximately 6,262 ETH valued at approximately $13 million. The attack exploited errors in how state was tracked for GMX interactions, allowing the attacker to self-liquidate and take out an undercollateralized loan using non-existent collateral. In October 2025, a third exploit targeting a flaw in the Cauldron V4 cook() function allowed an attacker to bypass the protocol's insolvency check by bundling a borrow action with a rogue action ID. Six attacker-controlled addresses each borrowed approximately 300,000 MIM per address for a total of approximately 1,793,755 MIM worth approximately $1.8 million. The stolen funds were converted to approximately 395 ETH and obfuscated via Tornado Cash. These three exploits in under two years total losses of approximately $21–$22 million and represent a pattern of recurring smart contract vulnerabilities in Abracadabra's Cauldron contracts.","heading":"History of Security Exploits","severity":"critical","sources":[{"credibility":2,"name":"Abracadabra Finance Hit By Exploit, $6.4M Drained — CoinMarketCap","type":"news_article","url":"https://coinmarketcap.com/academy/article/abracadabra-finance-hit-by-exploit-dollar64m-drained-and-mim-stablecoin-depegs"},{"credibility":1,"name":"Hacker steals $13 million in Abracadabra's Magic Internet Money using flash loan attack — The Block","type":"news_article","url":"https://www.theblock.co/post/348059/hacker-steals-13-million-in-abracadabras-magic-internet-money-seemingly-using-a-flash-loan-attack"},{"credibility":1,"name":"Abracadabra loses $1.8 million in protocol's third major DeFi hack since 2024 — The Block","type":"news_article","url":"https://www.theblock.co/post/373453/abracadabra-loses-1-8-million-in-protocols-third-major-defi-hack-since-2024"},{"credibility":2,"name":"Explained: The Abracadabra Hack (October 2025) — Halborn","type":"research","url":"https://www.halborn.com/blog/post/explained-the-abracadabra-hack-october-2025"},{"credibility":2,"name":"MIM Spell Third Exploit: Inside the $1.7M Abracadabra Hack — Three Sigma","type":"research","url":"https://threesigma.xyz/blog/exploit/mimspell-abracadabra-hack-breakdown"},{"credibility":2,"name":"Abracadabra Suffers Third DeFi Exploit As Hackers Drain $1.7 million — Yahoo Finance","type":"news_article","url":"https://finance.yahoo.com/news/abracadabra-suffers-third-defi-exploit-150012459.html"}]},{"content":"In January 2022, on-chain analyst ZachXBT publicly revealed that the CFO of Daniele Sestagalli's related project Wonderland Money — known pseudonymously as Sifu — was Michael Patryn, a co-founder of the defunct Canadian cryptocurrency exchange QuadrigaCX. QuadrigaCX collapsed in 2019 with approximately $169 million in customer funds unaccounted for. Patryn was also identified as Omar Dhanani, who had served 18 months in U.S. federal prison for conspiracy to commit credit and bank card fraud, and had additional convictions for burglary, grand larceny, and computer fraud. Sestagalli subsequently acknowledged that he had known about Patryn's real identity for approximately one month prior to the public disclosure and had elected not to disclose it, stating he was 'of the opinion of giving second chances.' The revelation triggered a sharp decline in the prices of TIME, SPELL, and other Sestagalli-affiliated tokens. While this controversy is distinct from the June 2026 depeg, it is part of the broader risk context for Abracadabra Money and its governance.","heading":"Founder Controversy: Wonderland CFO Dox (January 2022)","severity":"high","sources":[{"credibility":1,"name":"Crypto Co-Founder Revealed to Be Infamous Fraudster, Investors Shaken — Vice","type":"news_article","url":"https://www.vice.com/en/article/crypto-co-founder-revealed-to-be-infamous-fraudster-investors-shaken/"},{"credibility":2,"name":"Wonderland ($TIME) and $MIM scandal: what you need to know — Pontem Network","type":"news_article","url":"https://pontem.network/posts/wonderland-time-and-mim-scandal-what-you-need-to-know"},{"credibility":1,"name":"Daniele Sestagalli discusses Wonderland's future after QuadrigaCX co-founder dox — CoinTelegraph","type":"news_article","url":"https://cointelegraph.com/news/daniele-sestagalli-discusses-wonderland-s-future-after-quadrigacx-co-founder-dox"},{"credibility":2,"name":"Crypto Rocked Again: Wonderland CFO Is Ex-Convict Tied to Defunct Exchange — TheStreet","type":"news_article","url":"https://www.thestreet.com/investing/cryptocurrency/crypto-rocked-again-as-wonderland-cfo-turns-out-to-be-ex-felon"}]},{"content":"Users who held MIM as a dollar-equivalent at the time of the June 2026 depeg faced immediate and material financial harm. Any MIM held at the $1 assumption lost approximately 50–57% of its nominal value at the intraday low of approximately $0.43. Liquidity providers in Curve Finance pools pairing MIM against other stablecoins (such as USDT and USDC) were exposed to asset imbalance: as one side of a stablecoin pool loses its peg, liquidity providers accumulate a disproportionate share of the depegged asset. The suspension of Curve bribe incentives further reduced liquidity provider rewards during the period when risk was highest. Borrowers who had taken out MIM-denominated loans faced sharply increasing borrowing costs due to the emergency rate hikes, though they also gained the theoretical option to repay debt at a discount by purchasing MIM at below-face-value prices. No evidence of regulatory action or class action litigation was found as of the investigation date.","heading":"Retail Harm and Liquidity Provider Risk","severity":"high","sources":[{"credibility":2,"name":"Understanding the Crisis of Magic Internet Money and Its Implications for Investors — Value The Markets","type":"news_article","url":"https://www.valuethemarkets.com/cryptocurrency/news/understanding-the-crisis-of-magic-internet-money-and-its-implications-for-investors"},{"credibility":2,"name":"Abracadabra Issues Emergency Measures as MIM Stablecoin Depeg Escalates — CryptoBreaking","type":"news_article","url":"https://www.cryptobreaking.com/abracadabra-issues-emergency-measures-as/"}]},{"content":"MIM's depeg stability depends on several factors that differ from fiat-backed stablecoins such as USDC or USDT. MIM is minted against yield-bearing crypto collateral rather than held fiat, meaning collateral values fluctuate with broader market conditions. A simultaneous crypto market downturn — such as the one occurring in late June 2026 with Bitcoin testing $60,000 support — places downward pressure on collateral values, borrower solvency, and secondary-market MIM liquidity simultaneously. The protocol's supply contraction mechanism relies on borrowers voluntarily repaying debt, which is slower to act than algorithmic stabilization or direct fiat redemption. The 140 million SPELL token incentive program launched June 18 — nominally worth approximately $16,100 at SPELL's prevailing price of approximately $0.000115 — was insufficient to attract the liquidity depth needed to defend the peg, illustrating the limits of token-emission-based stabilization when governance token value has itself declined significantly. The protocol has no evidence of regulatory oversight, formal audits preventing repeat exploitation of the Cauldron architecture, or reserve backstop equivalent to fiat-backed stablecoin reserves.","heading":"Structural Risk Factors","severity":"high","sources":[{"credibility":2,"name":"Abracadabra.money injects $100K into Curve pool to stem MIM stablecoin depeg — CryptoRank","type":"news_article","url":"https://cryptorank.io/news/feed/23398-abracadabra-money-injects-100k-curve-pool-mim-depeg"},{"credibility":2,"name":"Abracadabra.money Launches New Curve Liquidity Pool with $100K Initial Deposit and SPELL Incentives Restart — KuCoin","type":"news_article","url":"https://www.kucoin.com/news/flash/abracadabra-money-launches-new-curve-liquidity-pool-with-100k-initial-deposit-and-spell-incentives-restart"},{"credibility":2,"name":"Spell Token Price — CoinMarketCap","type":"other","url":"https://coinmarketcap.com/currencies/spell-token/"}]}],"sources_used":[{"credibility":2,"name":"MIM Plunges 36% as Abracadabra Launches Emergency Measures — Crypto Times","type":"news_article","url":"https://www.cryptotimes.io/2026/06/25/mim-plunges-36-as-abracadabra-launches-emergency-measures/"},{"credibility":2,"name":"Abracadabra raises interest rates as MIM stablecoin depeg worsens — Crypto Briefing","type":"news_article","url":"https://cryptobriefing.com/abracadabra-mim-stablecoin-depeg-interest-rates/"},{"credibility":2,"name":"Abracadabra raises rates as MIM falls 50% — Grafa","type":"news_article","url":"https://grafa.com/en/news/crypto/abracadabra-raises-rates-as-mim-falls-50"},{"credibility":2,"name":"Abracadabra's MIM crisis deepens as dollar peg breaks again — crypto.news","type":"news_article","url":"https://crypto.news/abracadabras-mim-crisis-deepens-as-dollar-peg-breaks-again/"},{"credibility":2,"name":"Abracadabra Launches Emergency Plan After MIM Stablecoin Crashes — CoinPaper","type":"news_article","url":"https://coinpaper.com/32314/abracadabra-launches-emergency-plan-after-mim-stablecoin-crashes"},{"credibility":2,"name":"MIM Depegs To $0.50 As Abracadabra Raises Cauldron Rates — Crypto Adventure","type":"news_article","url":"https://cryptoadventure.com/mim-depegs-to-0-50-as-abracadabra-raises-cauldron-rates/"},{"credibility":2,"name":"Abracadabra Raises Rates as MIM Depeg Deepens — CoinInsider","type":"news_article","url":"https://www.coininsider.com/news/abracadabra-raises-rates-as-mim-depeg-deepens/"},{"credibility":2,"name":"Understanding the Crisis of Magic Internet Money — Value The Markets","type":"news_article","url":"https://www.valuethemarkets.com/cryptocurrency/news/understanding-the-crisis-of-magic-internet-money-and-its-implications-for-investors"},{"credibility":2,"name":"Abracadabra.money injects $100K into Curve pool — CryptoRank","type":"news_article","url":"https://cryptorank.io/news/feed/23398-abracadabra-money-injects-100k-curve-pool-mim-depeg"},{"credibility":1,"name":"Hacker steals $13 million in Abracadabra's Magic Internet Money — The Block","type":"news_article","url":"https://www.theblock.co/post/348059/hacker-steals-13-million-in-abracadabras-magic-internet-money-seemingly-using-a-flash-loan-attack"},{"credibility":1,"name":"Abracadabra loses $1.8 million in third major DeFi hack since 2024 — The Block","type":"news_article","url":"https://www.theblock.co/post/373453/abracadabra-loses-1-8-million-in-protocols-third-major-defi-hack-since-2024"},{"credibility":2,"name":"Explained: The Abracadabra Hack (October 2025) — Halborn","type":"research","url":"https://www.halborn.com/blog/post/explained-the-abracadabra-hack-october-2025"},{"credibility":2,"name":"Explained: The Abracadabra Money Hack (March 2025) — Halborn","type":"research","url":"https://www.halborn.com/blog/post/explained-the-abracadabra-money-hack-march-2025"},{"credibility":2,"name":"MIM Spell Third Exploit: Inside the $1.7M Abracadabra Hack — Three Sigma","type":"research","url":"https://threesigma.xyz/blog/exploit/mimspell-abracadabra-hack-breakdown"},{"credibility":2,"name":"Abracadabra Finance Hit By Exploit, $6.4M Drained — CoinMarketCap Academy","type":"news_article","url":"https://coinmarketcap.com/academy/article/abracadabra-finance-hit-by-exploit-dollar64m-drained-and-mim-stablecoin-depegs"},{"credibility":2,"name":"Abracadabra Suffers Third DeFi Exploit As Hackers Drain $1.7 million — Yahoo Finance","type":"news_article","url":"https://finance.yahoo.com/news/abracadabra-suffers-third-defi-exploit-150012459.html"},{"credibility":1,"name":"Crypto Co-Founder Revealed to Be Infamous Fraudster — Vice","type":"news_article","url":"https://www.vice.com/en/article/crypto-co-founder-revealed-to-be-infamous-fraudster-investors-shaken/"},{"credibility":2,"name":"Wonderland ($TIME) and $MIM scandal: what you need to know — Pontem Network","type":"news_article","url":"https://pontem.network/posts/wonderland-time-and-mim-scandal-what-you-need-to-know"},{"credibility":1,"name":"Daniele Sestagalli discusses Wonderland's future after QuadrigaCX co-founder dox — CoinTelegraph","type":"news_article","url":"https://cointelegraph.com/news/daniele-sestagalli-discusses-wonderland-s-future-after-quadrigacx-co-founder-dox"},{"credibility":2,"name":"Crypto Rocked Again: Wonderland CFO Is Ex-Convict — TheStreet","type":"news_article","url":"https://www.thestreet.com/investing/cryptocurrency/crypto-rocked-again-as-wonderland-cfo-turns-out-to-be-ex-felon"},{"credibility":2,"name":"Spell Token price today — CoinMarketCap","type":"other","url":"https://coinmarketcap.com/currencies/spell-token/"},{"credibility":2,"name":"Magic Internet Money (MIM): A Yield-Bearing Stablecoin — Gemini Cryptopedia","type":"other","url":"https://www.gemini.com/cryptopedia/magic-internet-money-mim-crypto-abracadabra-money"},{"credibility":2,"name":"Abracadabra.money Launches New Curve Liquidity Pool — KuCoin","type":"news_article","url":"https://www.kucoin.com/news/flash/abracadabra-money-launches-new-curve-liquidity-pool-with-100k-initial-deposit-and-spell-incentives-restart"}],"summary":"Abracadabra Money's Magic Internet Money (MIM) stablecoin experienced a severe depeg event in June 2026, falling from its $1 target to approximately $0.43–$0.50, a collapse of over 50%. The crisis built over ten days beginning June 15, 2026, and was accompanied by $994 million in cross-market liquidations and a broader crypto market downturn. Emergency measures launched June 25 — including sharply raised Cauldron interest rates and suspended Curve bribes — represent the protocol's fourth major stability incident since 2024.","timeline":[{"date":"2021-05-01","event":"Abracadabra Money launched by Daniele Sestagalli and anonymous co-founders 0xMerlin and Squirrel. MIM stablecoin minting against yield-bearing crypto collateral begins.","source":"BeInCrypto / Gemini Cryptopedia","source_url":"https://www.gemini.com/cryptopedia/magic-internet-money-mim-crypto-abracadabra-money"},{"date":"2022-01-01","event":"On-chain analyst ZachXBT reveals Wonderland Money CFO Sifu is Michael Patryn, co-founder of QuadrigaCX and convicted fraudster. SPELL and TIME prices crash. Sestagalli admits knowing for approximately one month prior.","source":"Vice / CoinTelegraph","source_url":"https://www.vice.com/en/article/crypto-co-founder-revealed-to-be-infamous-fraudster-investors-shaken/"},{"date":"2024-01-30","event":"Smart contract exploit targeting Cauldron V3 and V4 via rounding error in debt accounting drains approximately 2,740 ETH and 2.2 million MIM tokens — estimated loss approximately $6.4–$6.5 million. MIM briefly depegs.","source":"CoinMarketCap Academy / Neptune Mutual","source_url":"https://coinmarketcap.com/academy/article/abracadabra-finance-hit-by-exploit-dollar64m-drained-and-mim-stablecoin-depegs"},{"date":"2025-03-01","event":"Flash loan attack targeting Cauldrons integrated with GMX liquidity pools drains approximately 6,262 ETH valued at approximately $13 million. Represents Abracadabra's second major exploit.","source":"The Block","source_url":"https://www.theblock.co/post/348059/hacker-steals-13-million-in-abracadabras-magic-internet-money-seemingly-using-a-flash-loan-attack"},{"date":"2025-10-04","event":"Third exploit in under two years: attacker exploits Cauldron V4 cook() function vulnerability to drain approximately 1,793,755 MIM (~$1.8 million) using six attacker-controlled addresses. Stolen ETH laundered via Tornado Cash.","source":"The Block / Halborn","source_url":"https://www.theblock.co/post/373453/abracadabra-loses-1-8-million-in-protocols-third-major-defi-hack-since-2024"},{"date":"2026-06-15","event":"MIM trades at approximately $0.82, an 18% deviation from its $1 peg. Abracadabra injects $100,000 of protocol-owned liquidity into a new Curve Finance MIM pool in response to liquidity outflows.","source":"CryptoRank / Crypto Briefing","source_url":"https://cryptorank.io/news/feed/23398-abracadabra-money-injects-100k-curve-pool-mim-depeg"},{"date":"2026-06-18","event":"Abracadabra announces liquidity incentive program distributing 140 million SPELL tokens to MIM/Curve pool liquidity providers. The measure fails to halt the depeg.","source":"Crypto Briefing","source_url":"https://cryptobriefing.com/abracadabra-mim-stablecoin-depeg-interest-rates/"},{"date":"2026-06-24","event":"MIM collapses from approximately $0.85–$0.88 to approximately $0.49–$0.50, with an intraday low of approximately $0.43. Trading volumes spike over 2,500%. Cross-market liquidations across crypto markets exceed $994 million. Bitcoin tests $60,000 support.","source":"Crypto Times / Grafa / Crypto Adventure","source_url":"https://www.cryptotimes.io/2026/06/25/mim-plunges-36-as-abracadabra-launches-emergency-measures/"},{"date":"2026-06-25","event":"Abracadabra issues emergency statement and implements emergency measures: interest rates raised across all Cauldrons including deprecated ones; Curve bribes and direct incentives suspended until peg is restored. MIM begins partial recovery toward approximately $0.95.","source":"Crypto Times / CoinPaper / crypto.news","source_url":"https://coinpaper.com/32314/abracadabra-launches-emergency-plan-after-mim-stablecoin-crashes"}]},"v":1}