Bittensor was compelled to cease its network operations on July 3rd after a series of wallet breaches resulted in the theft of digital assets valued at a minimum of $8 million. Ala Shaabana, co-founder of Bittensor, announced the network outage in a post on July 3rd. The crypto industry has been plagued by hacks and breaches, which have hindered its widespread adoption. In the last 13 years, the industry has suffered losses totaling nearly $19 billion, with 785 reported instances of crypto hacks.
The theft was initially discovered by an anonymous investigator named ZachXBT, who sent a message on Telegram on July 3rd. According to ZachXBT, the unknown address “5FbW” was exploited to acquire 32,000 Bittensor (TAO) tokens worth approximately $8 million. This attack follows a similar incident that occurred on June 1st, where a different wallet was drained of TAO tokens valued at $11.2 million.
Private key leaks have now surpassed smart contract vulnerabilities as the leading cause of hacked funds. 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. This shift can be attributed to hackers targeting easier targets. In contrast, losses resulting from smart contract vulnerabilities decreased by 92% in 2023, amounting to $179 million, down from an astonishing $2.6 billion in 2022.
Mriganka Pattnaik, co-founder and CEO of crypto risk and intelligence platform Merkle Science, explained that hackers are focusing on more accessible targets. As a result, smart contracts are no longer the primary source of vulnerability. In 2023, the majority of hacked funds were lost due to private key leaks.
The crypto industry continues to face challenges in terms of security, but efforts are being made to address these issues and protect digital assets.