“The exploit allowed a malicious actor to drain funds from multiple Solana wallets,” the company said. said via Twitter. “Engineers are currently working with several security researchers and ecosystem teams to determine the root cause of the exploit, which is currently unknown.”
Wallets like Slope and Phantom are believed to have been hacked. These are “hot wallets”, that is, wallets that allow lightning-fast transactions because they are always connected to the Internet, instead of “cold wallets”, which usually require a USB stick and are disconnected for long periods of time. Solana – which at one time had the fifth most popular brand before the slide – made a name for itself as a blockchain that can transfer funds extremely quickly.
The news follows Monday’s revelation from Nomad, the so-called blockchain bridge, which admitted that around $190 million was taken from its system after a hacker breached it. The attack was known as a “free-for-all” because the hacker’s original code allowed anyone to copy it and steal the cryptocurrency for themselves. They don’t know where the money went.
Wanderer said its executives were working with law enforcement and blockchain data firm TRM Labs to find the funds and could not be reached for comment Wednesday afternoon. It says they are working on “research/recovery” as well as “technical fixes.”
In an unusual move, the company provided an address early Wednesday to anyone who might have decided to cash in on noble protection.
“Dear white hat hackers and ethical researchers who have secured ETH/ERC-20 tokens, please send funds to this ethereum wallet address,” the social networking site said on Twitter. It is not known whether the Good Samaritans took advantage of the company’s offer.
A blockchain bridge allows users to exchange cryptocurrency from one blockchain to another — say, bitcoin to ethereum — making it vulnerable to what security experts call “both sides,” which are flaws in both blockchains. These bridges are also usually newer, and in some cases, faster in design. Another blockchain bridge known as Ronin was hacked in March a total of more than 600 million cryptocurrency.
“To date, approximately $1.8 billion has been stolen from these services, and it’s troubling that their security standards don’t seem to warrant the huge amount of capital entrusted to them,” said co-founder and chief scientist Tom Robinson. Ellipticalsaid in an email to The Washington Post, referring to the bridges.
Solana’s case, meanwhile, raised concerns because he was vulnerable to factors beyond his control. While some say the hack doesn’t show that any fundamentals of the industry are shaky — “It wasn’t a major problem with the blockchain, it probably looks like one app that someone built went wrong,” crypto mogul Sam Bankman-Fried said. Fortune said on Wednesday – he emphasized to critics the interconnectedness of cryptocurrency networks and the inability of one part to fully verify all others.
While the hacks involved individual entities, blockchain bridges and hot wallets also highlight what many crypto enthusiasts say is so appealing about the form: ease of use. The former allows different blockchains to communicate, which could be as important to the next era of technology as, say, people with AT&T and Verizon phone plans being able to talk to each other were before.
And cold storage, while safer, seems to undermine the essence of cryptocurrencies’ appeal, which is to allow transfers to be made immediately and without waiting for traditional bank transactions.
On social media on Wednesday, many showed images of their wallets suddenly showing zero balance, while others questioned the hot wallets. “So you’re telling me that storing your entire net worth in a Google Chrome extension would be considered a bad move?” one wad wrote from Phantom.
But experts say the problem may be more serious. They note that finding solutions may require sacrifices to the goals envisioned by crypto idealists.
“One of the benefits of opening up the banking system in this way is the speed and lower barriers to transactions,” said William Callahan III, a former special agent with the Drug Enforcement Administration who now serves as director of government and strategic affairs at the company, called Blockchain Intelligence Group. “But these hacks show that we need to take a step back and question that idea of accessibility, because speed is also part of the problem.” We have to balance speed with safety.
Still, Callahan said he believes such consolidation is possible. “Blockchain bridges need to strengthen their security, and perhaps users need to use more cold storage,” he added.
Some people give up on cryptocurrency, the need for speed may diminish on its own. Bitcoin, a strong barometer of cryptocurrency activity in 2022 has lost 50 percent of its value as investors ditched the asset, though it has rebounded from less than $19,000 in June to around $23,000 in recent weeks.