First note that from the readMe, any type of ERC20 token is intended to be integrated.
Now protocol integrates a flow limiting logic and in order for interchain transfers to be processed, there is a need to check the amount being received/sent against the flow limit, for e.g., consider giveToken() that gets called whenever there is a need to process an interchain transfer. This function adds in the flown amount before finalizing the transfer, and when adding the in-flown amount, there is a check that reverts when the limit is passed.
https://github.com/code-423n4/2024-08-axelar-network/blob/69c4f2c3fcefb1b8eb2129af9c3685a44ae5b6fe/interchain-token-service/contracts/utils/FlowLimit.sol#L94-L110
Now from here, we can see the different supported token manager types.
The issue is the fact that the token balance differences logic is only employed for the classic Fee on transfer tokens in the Token Handler. This then allows for tokens like cUSDCv3s integration to be broken; this is because whereas this token is not a FOT token, it also includes a tweak in its transfer logic.
Now with cUSDCv3, its implementation of transferFrom calls the internal transferInternal function here and if we attach type(uint256).max it only transfers the amount of tokens the user owns.
This then means that if the flow limit for an epoch gets set, any malicious intended user can take the following steps 4 times a day, An epoch lasts 6 hours, and ensure transfers are permanently blocked:
QA, this is because a trusted admin should set this token as an FOT token; however, this might be missed as it only includes this logic when being transferred with an amount of type(uint256).max.
Consider not supporting this type of token or just check balances for each token manager type, since upgraded tokens are supported.
