As an aftermath of the attack, TAO dropped by 15%, reflecting that holders have entered a panic mode.
There have been reports of unusual activities on Bittensor users’ wallets and this has forced developers at the purported decentralized AI project to temporarily suspend operations. The attack led to the loss of about $8 million worth of the project’s TAO tokens from one wallet. Per insights shared by independent security researcher ZachXBT, the loss is equivalent to 32,000 TAO.
Bittensor Team Launch Investigation into Attack
Markedly, the Bittensor team has swung into action to mitigate the losses and check for the vulnerability point.
“We are investigating, and in an abundance of caution, have recently fully halted transactions on-chain until there is more information available to us about the nature of this attack,” a Bittensor core team member wrote on the project’s Discord channel.
In the meantime, there are suspicions that the attack has to do with the leakage of a private key. This private key is a string of letters and numbers that acts as a password to protect and manage tokens in a wallet. Not much detail is known about the exploit but the team is working to avoid a recurrence. This is evident in the decision to temporarily halt transactions on the network.
As an aftermath of the attack, TAO dropped by 15%, reflecting that holders have entered a panic mode. However, the token has recovered slightly with the Bittensor team at the helm of affairs. At the time of this writing, TAO was trading at $239.15 with only an 11.3% drop within the last 24 hours. The network still boasts of a market capitalization of up to $1.6 billion.
Bittensor co-founder Ala Shaabana took to the X app to confirm that the chain has been put on “safe mode”. This means that blocks are getting produced but no transactions are being processed. Data from Bittensor’s block explorer shows that the last block was confirmed at or around 23:00 UTC on Tuesday.
It is worth noting that Bittensor identifies as one of the leading companies that link machine learning models owned by various individuals worldwide. It is one of the biggest Artificial Intelligence-focused crypto projects. Hence, the recent event with Bittensor’s wallets reflects the rise in scams and exploits on top crypto projects.
More Attacks on the Crypto Sector
Last month, Swiss crypto exchange Lykke suffered a cyberattack that resulted in the loss of over $22 million worth of digital assets.
For this case, SomaXBT, a Web3 security researcher, stated that an unknown entity withdrew 158 Bitcoin (BTC) and 2161 Ethereum (ETH) from the exchange. The siphoned ETH assets were allegedly swapped to DAI, while the BTC was moved to multiple wallets.
Even the renowned Cardano (ADA) blockchain faced a distributed denial of service (DDoS) attack where the bad actor made an attempt to overwhelm the blockchain with excessive transaction load. However, the team was able to mitigate the DDoS attack before further damage was done.
The frequency of these attacks calls for intense security measures for crypto exchanges and caution on the part of users.
next