An unknown hacker targeted the Solana ecosystem on Wednesday and drained approx. $5 million worth of SOL and other tokens.
The Solana blockchain has become the target of a cyberattack late Tuesday night, during which thousands of its wallets were drained of $4 to $5 million worth of Solana and USDC.
The attack originated from the Solana browser wallet Phantom. Research revealed that the hacker compromised user keys, or seedphrases, which were then re-used on different chains. Solana’s representative Austin Federa confirmed that hardware wallets were safe.
For your information, Solana is Ethereum blockchain’s rival cryptocurrency ecosystem and has suffered network outages and security-related issues previously. However, although unconfirmed, there are also rumors that it could be an iOS-based supply chain attack.
Seems like an iOS supply chain attack. Multiple plausible wallets that only received sol and had no interactions beyond receiving have been affected. https://t.co/ne0g3ZmLH5— SMS T◎ly, 🇺🇸 (@aeyakovenko) August 3, 2022
As well as key that were imported into iOS, and generated externally.https://t.co/hStAr1mU6Q
It is worth noting that in April 2022, MetaMask warned Apple users to disable automatic iCloud backup of their wallet data. The warning resulted from the losses sustained by an NFT collector who reportedly lost $650,000 worth of digital assets after their MetaMask wallet was wiped out within seconds.
Damages Caused by the Attack
The damages vary as more than $5.2 million worth of crypto assets were stolen from over 5,000 wallets, explained blockchain forensics firm Elliptic. The company’s co-founder Tom Robinson said that the root cause of the attack isn’t yet clear, but from whatever is known, it appears to be caused by a “flaw in certain wallet software rather than in the Solana blockchain itself.”
If you used a Slope wallet (for SOL) in the past, move your funds to a different wallet ASAP. Do not “import” the old wallet. Use a new private key or seed phrase. If you don’t know those words mean, send your SOL to @binance. The easy way. https://t.co/t1lYcgaX5z— CZ 🔶 Binance (@cz_binance) August 3, 2022
Solna Status, a Twitter account run by Solana Foundation later confirmed that 8,000 wallets were targeted. The targeted currencies include SOL, SL, and several other Solana-based tokens from the Slope and Phantom digital wallets.
Blockchain audit firm OtterSec shared that the transactions were signed by the wallets’ owners, meaning private keys must have been compromised.
Investor Community Shocked Over Back-to-Back Attacks on Crypto
The Solana attack has irked the investor community as lately there has been an unprecedented surge in cybercrimes targeting crypto exchanges and wallets. Several of Solana’s traders took to Twitter to express disappointment, calling for a short position in the cryptocurrency.
A short position is initiated by a trader by selling a borrowed security or its futures contract/derivative to buy it back when the price is lower. After the attack, Solana’s SOL token plunged 7.3% and traded at $38.40 on Wednesday, marking its lowest this week.
🚨 Widespread Solana private key compromise 🚨— foobar (@0xfoobar) August 3, 2022
– attacker is stealing both native tokens (SOL) and SPL tokens (USDC)
– affecting wallets that have been inactive for >6 months
– both Phantom & Slope wallets reportedly drained pic.twitter.com/AkZXOGLD0Q
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