Over 8,000 Solana Wallets Drained Millions Worth of Crypto in Cyberattack

8,000 Solana Wallets Drained Millions Worth of Crypto in Cyberattack

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.

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.”

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.

Over 8,000 Solana Wallets Drained Millions Worth of Crypto in Cyberattack

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.

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