Cosmos EVM: incorrect state handling during nested EVM execution paths
Advisory ID: ASA-2026-002
Component: ICS20 Precompile
Status: Resolved
Published: March 2026
Contact: [security@cosmoslabs.io](mailto:security@cosmoslabs.io)
# Security Advisory ASA-2026-002
Status: Resolved. A patch is available and all known affected chains have either applied mitigations or [upgraded](https://github.com/cosmos/evm/releases/tag/v0.6.0).
| Field | Value |
| --- | --- |
| Severity | Critical |
| Affected Component | ICS20 Precompile |
| Affected Versions | Cosmos EVM implementations including the ICS20 precompile |
| Patched Version | [v0.6.0](https://github.com/cosmos/evm/releases/tag/v0.6.0) |
| First Reported | January 21, 2026 |
| Public Disclosure | March 2026 |
Introduction
Recently, there was a vulnerability affecting a feature used by some chains built on the Cosmos EVM stack. Working together with ecosystem partners and affected teams, particularly Saga, B-Harvest, Mantra, Zellic and Sherlock, Cosmos Labs investigated the issue, coordinated mitigations, developed a permanent fix, and issued a patch to affected chains.
We appreciate the collaboration of the teams who assisted during the investigation and response process and thank our ecosystem partners for their support in coordinating mitigation and validation efforts.
Remediation Summary
On January 21, 2026, Cosmos Labs was notified of suspicious activity on a network running the affected implementation. The issue resulted in financial loss on the Saga EVM network.
After confirming the vulnerability, Cosmos Labs coordinated with the affected chain team and ecosystem partners to investigate the issue, deploy mitigations, and assist other chains running the affected code.
Cosmos Labs contacted chains known to be running versions containing the affected component to verify their configurations and support mitigation where necessary. At the time of publication, all known affected chains have either applied mitigations or upgraded to a patched version.
Root Cause
The vulnerability was caused by incorrect state handling during nested EVM execution paths involving the ICS20 precompile.
Under certain execution conditions, state updates performed during recursive calls were not correctly reflected in the outer execution context. This could allow repeated use of the same token balance within a single transaction.
Mitigation
As an immediate mitigation, chains were advised to disable the ICS20 precompile through a coordinated upgrade.
Cosmos Labs assisted ecosystem teams in verifying whether their chains were affected and in applying the mitigation where required.
- 15 chains were identified as running code containing the issue
- 6 chains did not have the affected feature enabled
- The remaining chains implemented the mitigation before exploitation occurred
- 1 chain experienced an exploit prior to mitigation
Long-Term Fix
A permanent fix was implemented to ensure state consistency across nested EVM execution paths. The patch was distributed privately to affected teams for validation and later released publicly.
The fix is included in [v0.6.0](https://github.com/cosmos/evm/releases/tag/v0.6.0).
Am I Affected?
Chains may be affected if they:
- Run versions of the Cosmos EVM stack that include the ICS20 precompile implementation
- Have the ICS20 precompile enabled
- Have not upgraded to v0.6.0 or applied the mitigation
Chains that have upgraded to v0.6.0 or have disabled the ICS20 precompile are not vulnerable to this issue.
If you are unsure whether your chain is affected, please contact:
[security@cosmoslabs.io](mailto:security@cosmoslabs.io)
Timeline
July 2024
The code containing the vulnerability was introduced upstream.
January 21, 2026
A network running the affected implementation experienced an exploit. The incident resulted in an estimated loss of approximately $7M on that network.
January 21, 2026
Cosmos Labs was notified of the potential vulnerability and began investigating.
January 21–22, 2026
The issue was reproduced and an initial mitigation was identified.
Late January 2026
Root cause analysis was conducted and a long-term fix was developed.
Early February 2026
The fix was validated internally and shared privately with affected ecosystem teams for review and testing.
Mid February 2026
Patches and mitigation guidance were distributed to chains running affected code.
March 2026
The permanent fix was released publicly as part of v0.6.0.
Acknowledgements
We would like to thank the teams and security partners who collaborated with us during the investigation and remediation process, including contributors from:
- Saga
- B-Harvest
- Mantra
- Zellic
- Sherlock
Their collaboration and responsiveness helped accelerate investigation, validation of the fix, and coordinated mitigation acr
