Bittensor in Crisis: $8 Million Stolen, Network Suspended

Crypto News Exploits

Written by Aaron S.,

Editor-In-Chief

Last Updated: July 03, 2024

Key Takeaways

Bittensor shut down its network on July 3 following a major security breach that led to the theft of over $8 million in digital assets, potentially due to private key leakage;
Bittensor co-founder Ala Shaabana announced that the network has been put into safe mode;
78% of stolen assets in 2023 were linked to private key leaks.

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Bittensor in Crisis: $8 Million Stolen, Network Suspended

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On July 3, Bittensor shut down its network operations in response to a major security breach, which led to the theft of over $8 million in digital assets.

Ala Shaabana, Bittensor's co-founder, made the announcement on July 3 through a post on X.

He confirmed, "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. Stay tuned."

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The incident was first identified by the crypto investigator ZachXBT, who noted in a Telegram message:

Bittensor was halted due to additional thefts earlier today potentially as a result of private key leakage.

According to the investigator, the attack involved the unauthorized use of the address '5FbW' to steal 32,000 Bittensor (TAO) tokens valued at approximately $8 million. This breach follows a previous incident on June 1, where another wallet was drained of $11.2 million in TAO tokens.

Recent trends indicate a shift in hacking methods, with private key leaks now being the primary cause of crypto theft. According to Merkle Science's "2024 Crypto HackHub Report," over 78% of the stolen digital assets in 2023 were due to private key leaks, amounting to $2.5 billion.

In contrast, the amount of digital assets lost to smart contract vulnerabilities has decreased, falling 92.5% to $179 million in 2023 from $2.6 billion in 2022.

Mriganka Pattnaik, co-founder and CEO of Merkle Science, explained:

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.

The increasing frequency and sophistication of these attacks pose challenges for the crypto industry, requiring strong security measures to protect digital assets.

In other news, a governance delegate from MakerDAO has recently fallen victim to a phishing scam, resulting in the loss of $11 million worth of tokens.