Pair of hacks shake up an already strained crypto industry

Pair of hacks shake up an already strained crypto industry


A pair of crypto hacks with a total loss of nearly $200 million and potentially affecting more than 10,000 users has sparked concern in an industry already unstable due to falling prices.

On Wednesday, Solana, a popular blockchain and token, said that some wallets that were holding their assets had been hacked. The company said that at least 7,700 of these wallets are believed to have been affected, while London-based blockchain analytics firm Elliptic estimated $5.2 million worth of cryptocurrencies were stolen, including Solana tokens and a stablecoin known as USD.

“One loophole allowed a malicious actor to drain money from a number of Solana’s wallets.” He said via Twitter. “Engineers are currently working with various security researchers and ecosystem teams to identify the root cause of the exploit, which is currently unknown.”

The hack is believed to have taken over wallets such as Slope and Phantom. These are “hot wallets” – that is, wallets that allow fast transactions because they are always connected to the Internet, unlike “cold wallets”, which usually require a USB drive and have long periods of outage. Solana – which at one point had the 5th most popular place before the chip – has made a name for itself as a blockchain that can transfer funds very quickly.

The news comes on the heels of the disclosure on Monday from Nomad, the so-called Blockchain Bridge, which admitted that around $190 million was taken from it after a hacker hacked into its system. The attack was known as “Free for All,” because the hacker’s original code allowed anyone to copy it and steal the cryptocurrency for themselves. It is not known where the money went.

Bedouin He said Its executives have been working with law enforcement and a blockchain data company called TRM Labs to locate the funds, with no update as of Wednesday afternoon. She said they are working on “investigation/recovery” as well as “technical solutions.”

In an unusual move, the company early Wednesday provided an address to anyone who may have chosen to seize funds in a noble act of protection.

“Dear white hat hackers and friends of ethical researchers who have been protecting ETH/ERC-20 tokens, please send the funds to the following ethereum wallet address,” tweeted. It is not known if any of the righteous Samaritans took communion on their offer.

A blockchain bridge allows consumers to switch cryptocurrency from one blockchain to another — for example, from Bitcoin to Ethereum — making it vulnerable to what security experts call “both sides,” weaknesses in either blockchain. These bridges also tend to be newer and, in some cases, designed faster. In March, another blockchain bridge known as Ronin was hacked with over $600 million worth of cryptocurrency.

“To date, nearly $1.8 billion has been stolen from these services, and it is alarming that their security standards do not match the huge amounts of capital entrusted to them,” said Tom Robinson, co-founder and chief scientist at Elliptic. In an email to the Washington Post, she points out bridges.

Meanwhile, Solana’s case raised concern as she had become weak due to factors beyond her control. While some argue that the hack doesn’t show any foundations for the industry are shaky — “this wasn’t a fundamental issue with blockchain, it likely looks like an app someone created was buggy,” crypto mogul Sam Bankman-Fried told Fortune on Wednesday — it highlighted to critics the interconnectedness of crypto networks and the inability of one part to fully examine all the others.

While the hacks involved separate entities, blockchain bridges and hot wallets also underscore what many crypto enthusiasts say is very attractive about form: ease of use. The first allows disparate blockchains to communicate — potentially essential for the coming technology era, as people with AT&T and Verizon phone plans, for example, were able to talk to each other earlier.

And while cold storage is more secure, it appears to undermine what lies at the core of cryptocurrency’s appeal, which is to allow transfers without the delay and waiting of traditional banking transactions.

On social media, Wednesday, many showed pictures of their wallets suddenly showing zero balances, while others questioned their hot wallets. “So you’re telling me that storing my entire net worth in google chrome would be a bad move?” one shake Wrote from Phantom.

But experts say the issue may be more serious than that. They pointed out that finding solutions could mean making sacrifices within the goals envisioned by cryptographic idealists.

Said William Callahan III, a former DEA special agent who is now director of government and strategic affairs for a company called Blockchain Intelligence Group. “But what these hacks show is that we need to step back and question the idea of ​​accessibility, because speed is also part of the problem. We need to balance speed and security.”

However, Callahan said he believes such support is possible. “Blockchain bridges need to step up their protection, while consumers may need to use more cold storage,” he added.

The need for speed may diminish on its own as some people exit cryptocurrency. Bitcoin, a strong measure of crypto activity, lost 50 percent of its value in 2022 as investors abandoned the asset, although it has seen a rebound from below $19,000 in June to hover around $23,000 in recent weeks.

#Pair #hacks #shake #strained #crypto #industry

Leave a Comment

Your email address will not be published.