Solana blockchain targeted in cyberattack, hackers stole $5.2 million worth of crypto assets from around 8,000 wallets

08/04/2022 / By Arsenio Toledo

Approximately 8,000 digital wallets connected to the blockchain platform Solana have been targeted by hackers, who have drained them of over $5.2 million worth of digital assets – including the platform’s own sol coin, USD Coin (USDC) and a small number of non-fungible tokens.

According to Twitter account Solana Status, which provides status updates for the Solana network, approximately 7,767 digital wallets have been compromised by hackers who targeted an exploit that allowed them to drain the wallets.

According to blockchain analytics and security firm Elliptic, the estimated number of compromised wallets is actually 7,936. OtterSec, an independent group of security researchers that audits blockchain platforms, believes that at least 8,510 wallets were compromised. (Related: Founder of fraudulent crypto CONVICTED for stealing over $6 million from investors.)

Solana’s sol token is one of the largest cryptocurrencies in the world, next to bitcoin and ether. The hack of the token was discovered on the evening of Tuesday, Aug. 2, after multiple users began reporting that assets held in “hot wallets” – wallets that are always connected to the internet, notably Phantom, Slope and Trust Wallet – were drained of their assets.

Two hours after the hack was initially detected, sol’s value fell by eight percent. Since then, its value has dropped by another percent, while trading volume has surged to about 105 percent of its average in 24 hours following the hack’s detection.

“Engineers continue to investigate the root cause of an incident that resulted in approximately 8,000 wallets being drained,” said Solana Foundation Head of Communications Austin Federa. “This does not appear to be a bug with Solana core code, but in software used by several wallets popular among users of the network.”

How the hack happened is still unclear

While it is still unclear how the hack occurred, analysts think the attackers were able to approve transactions on behalf of the owners of the compromised hot wallets, allowing them to transfer funds without the consent of the victims.

Solana co-founder Anatoly Yakovenko believes the exploit is the result of a “supply chain attack,” or a type of cyber attack that occurs when an attacker accesses a victim’s account by targeting a third-party vendor.

“Seems like an iOS supply chain attack. Multiple plausible wallets that only received sol and had no interactions beyond receiving have been affected,” wrote Yakovenko on his personal Twitter account. “Android seems to be affected as well. All the confirmed stories so far have had the key imported or generated on mobile. Most of the reports are Slope, but a few Phantom users as well.”

Elliptic noted that it believes there is nothing wrong with the Solana blockchain platform itself. “The root cause is still not clear, but it appears to be due to a flaw in certain wallet software,” the firm wrote.

The extent and precise nature of the hack are still unclear, but for now security analysts have noted that the exploit has only affected those who have Solana products in their hot wallets.

Solana Status advised hot wallet users to move their funds to a hardware wallet as soon as possible.

“There’s no evidence hardware wallets have been impacted – and users are strongly encouraged to use hardware wallets,” it wrote. “Do not reuse your seed phrase on a hardware wallet – create a new seed phrase. Wallets drained should be treated as compromised and abandoned.”

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