Bittensor, a major player in the world of cryptocurrencies, was compelled to halt its network operations on July 3 due to a series of thefts resulting in the loss of at least $8 million in digital assets. The shutdown was an effort to minimize the damage following fraudulent withdrawals from users’ wallets.
On the same day, Bittensor co-founder Ala Shaabana announced emergency measures in response to the incident. “As an update, we contained the attack and put the chain in secure mode (blocks producing, but no transactions are allowed). We are still in the middle of the investigation and considering all possibilities,” Shaabana stated. This action underscores the challenges faced by the industry in safeguarding itself against hacks, which have posed a significant barrier to the broader adoption of crypto technologies.
The theft was initially discovered by pseudonymous onchain investigator ZachXBT, who disclosed the details via a Telegram message also dated July 3. “Bittensor was disrupted due to additional thefts earlier today, possibly as a result of a private key leak,” ZachXBT reported. According to investigations, an unknown address, identified as “5FbW,” managed to withdraw approximately 32,000 Bittensor (TAO) tokens, equivalent to around $8 million.
This is not the first time the network has encountered security issues. Just a month prior, another wallet was compromised, resulting in the loss of $11.2 million worth of TAO tokens. Smart contract vulnerabilities have historically been identified as the main entry points for attacks, but 2023 has shown a worrying trend with private key leaks surpassing these incidents, as noted in Merkle Science’s “2024 Crypto HackHub Report.” “Hackers are opting for easier targets,” remarks Mriganka Pattnaik, co-founder and CEO of Merkle Science.
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