On July 3, Bittensor had to halt its network operations following a series of wallet drains that resulted in the theft of at least $8 million worth of digital assets.
Ala Shaabana, Bittensor’s co-founder, announced the network outage on the same day in a post on X, stating:
“By way of an update, we have contained the attack and put the chain into safe mode (blocks producing but no transactions are permitted).
“We’re still mid-investigation and are considering all possibilities.”
Hacks and exploits continue to be a major concern in the crypto space, hindering its widespread adoption.
Over the past 13 years, the industry has lost nearly $19 billion to thefts, with 785 reported crypto hacks.
The recent theft was first identified by pseudonymous onchain investigator ZachXBT, who posted in a Telegram message on July 3:
“Bittensor was halted due to additional thefts earlier today potentially as a result of private key leakage.”
An unknown address, “5FbW,” was used to steal 32,000 Bittensor (TAO) tokens, worth approximately $8 million.
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This incident followed another attack on June 1, where a different wallet was drained of $11.2 million worth of TAO tokens, as noted by ZachXBT.
While smart contract vulnerabilities used to account for most of the hacked funds, private key leaks have now become more prevalent.
According to the “2024 Crypto HackHub Report” by Merkle Science, over 55% of the hacked digital assets in 2023 were lost due to private key leaks.
Mriganka Pattnaik, co-founder and CEO of Merkle Science, explained the trend:
“While smart contract vulnerabilities remain a concern, hackers increasingly target areas outside smart contracts, like private key leaks.
“These leaks, often due to phishing attacks or insecure storage practices, have led to significant losses.”
In contrast, losses from smart contract vulnerabilities significantly decreased, with hacked funds dropping 92% to $179 million in 2023, compared to a staggering $2.6 billion in 2022.
This shift highlights the changing landscape of crypto security, emphasizing the need for stronger protection against private key leaks and other non-contract-related vulnerabilities.
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