Gnus.AI, the artificial intelligence network, was hit with a significant financial blow on May 5. A token-minting exploit resulted in a loss of approximately $1.27 million. To address the issue, the team at Gnus.AI has announced plans to release a new version of their token, Genius (GNUS), and has advised users to refrain from purchasing the old version.
According to blockchain security firm CertiK, the attacker managed to gain access to the team’s account by obtaining the private key that begins with 0x18. With control of this account, they were able to copy the token’s “salt” data from Ethereum. This allowed them to create a version of the token on the Fantom network using the Axelar bridge protocol. Subsequently, the attacker minted 100 million fake GNUS tokens, bridged them to Ethereum, and sold them on the market. The resulting influx of fake tokens caused the price to crash, effectively transferring the wealth of existing tokenholders to the attacker, who received real assets in exchange for worthless tokens.
Gnus.AI CEO, known as “SuperGenius,” took to social media platform X to address the situation on May 5. SuperGenius claimed that the compromise of the 0x18 account occurred due to an attacker gaining access to the team’s private Discord communications. In the post, SuperGenius stated, “Apparently the hackers can watch private messages on discord.” As a temporary solution, the team plans to deposit $500,000 worth of Ether (ETH) from their own funds into a liquidity pool for the new token upon its launch. Additionally, they will deposit $500,000 worth of fees that are owed but currently locked until February 2025. This compensation amounts to a total of $1 million.
CertiK estimates that the exploit resulted in a loss of $1.25 million, indicating that the initial distribution of funds will cover 80% of the losses. While blockchain networks continue to face risks of exploits, there is evidence suggesting that these attacks may be decreasing as security practices improve. According to CertiK’s report on April 30, crypto users suffered the lowest amount of losses from exploits since 2021 in the month of April.