Submitted by shaflow2, also found by 0xAadi, Agorist, Alekso, arnie, doublekk, falconhoof, Giorgio, hezze, iamandreiski, jesjupyter, kn0t, KupiaSec, MrValioBg, pairingfriendly, Pelz, phoenixV110, radev_sw, slowbugmayor, SpicyMeatball, undefined_joe, vladi319, web3km, X-Tray03, ZoA, and zzykxx
https://github.com/code-423n4/2025-02-thorwallet/blob/98d7e936518ebd80e2029d782ffe763a3732a792/contracts/Titn.sol#L103
When isBridgedTokensTransferLocked is set to true, regular users transfer and transferFrom operations will be restricted. Regular users should not send their tokens to any address other than the transferAllowedContract and lzEndpoint. However, since bridge operations are not subject to this restriction, users can send tokens to any address by performing two bridge transfers.
This breaks the primary invariant: Unless enabled (or the user is the admin), users who merge their TGT to TITN should not be able to transfer them to any address other than the LayerZero endpoint or a specified contract address (transferAllowedContract).
The TITN contract overrides the transfer and transferFrom functions, adding the _validateTransfer validation to restrict regular users transfers in certain cases, as determined by the admin.
https://github.com/code-423n4/2025-02-thorwallet/blob/98d7e936518ebd80e2029d782ffe763a3732a792/contracts/Titn.sol#L71. 
However, since bridge operations do not use transfer/transferFrom, but instead use mint/burn, this allows users to transfer tokens to any address by performing two bridge operations. 
For example:
 Proof Of Concept
To run the POC, you can add the following code to the test/hardhat/MergeTgt.test.ts file:
Logs:
It is recommended to also disable the send function when isBridgedTokensTransferLocked is set to true. Alternatively, add the _validateTransfer check to the mint/burn functions.
cacaomatt (THORWallet) confirmed
0xnev (judge) commented:
cryptoxz (THORWallet) commented:
cacaomatt (THORWallet) confirmed and commented:
0xnev (judge) commented:
THORWallet mitigated:.
Status: Mitigation confirmed. Full details in reports from shaflow2, web3km, and kn0t.
