Bittensor experienced a cessation of network operations on July 3 due to a string of wallet breaches resulting in the theft of over $8 million worth of digital assets.
Ala Shaabana, co-founder of Bittensor, disclosed the network shutdown as a response to the exploit in a post on July 3. The incident underscores ongoing security challenges within the cryptocurrency sector, which continue to impede widespread adoption. Over the past 13 years, the industry has suffered losses nearing $19 billion from 785 reported hacks.
The breach, which saw approximately 32,000 Bittensor (TAO) tokens stolen, equivalent to about $8 million, was initially identified by onchain investigator ZachXBT in a Telegram message on July 3. This incident follows a similar attack in June, where another wallet lost $11.2 million worth of TAO tokens.
TAO $11 million wallet drain. Source: ZachXBT
According to ZachXBT, the theft involved an unknown address “5FbW” exploiting vulnerabilities potentially linked to private key exposure.
The rise in private key leaks has eclipsed smart contract vulnerabilities as the leading cause of cryptocurrency thefts. In 2023, over 55% of stolen digital assets, amounting to $179 million, were attributed to private key breaches, according to the “2024 Crypto HackHub Report” by Merkle Science.
Crypto total losses by vulnerabilities. Source: Merkle Science
Mriganka Pattnaik, co-founder and CEO of Merkle Science, noted that hackers increasingly target private keys due to their perceived vulnerability compared to more complex smart contract exploits. In contrast, losses from smart contract vulnerabilities plummeted by 92% in 2023 to $179 million, significantly down from $2.6 billion in 2022.
In summary, the recent challenges faced by Bittensor highlight persistent security risks in the cryptocurrency realm, underscoring the importance of robust security measures to safeguard digital assets.