According to CryptoPotato, Bittensor has temporarily halted its network operations due to a suspected security breach. The incident, which targeted several wallets, was revealed by on-chain analyst ZachXBT, who suggested that the breach might involve the leakage of private keys, potentially leading to unauthorized access and thefts.
A Bittensor community Discord administrator announced that all transactions have been paused to prevent further unauthorized access while the team investigated the issue. The team is currently investigating an attack involving some Bittensor wallets. Co-founder Ala Shaabana confirmed that the blockchain was put into 'safe mode,' allowing blocks to be produced but halting all transactions.
ZachXBT reported that approximately $8 million worth of TAO, equivalent to about 32,000 native Bittensor (TAO) tokens, was stolen. This security breach led to a 17% decline in the TAO token’s value, dropping it to a low of $227. However, the token has since rebounded to trade at $240, representing a 10% decrease within the last 24 hours.
This incident is not the first for the project. In June, a user on the platform lost more than 28,000 tokens worth around $11.2 million due to a phishing attack. The attacker divided the stolen funds into 18 different wallet accounts, which were then consolidated into 16 accounts. These 16 accounts bridged the tokens from the TAO network to Ethereum, subsequently swapping them for ETH and USDC stablecoins using three different decentralized exchanges.
Crypto projects have increasingly become targets for scammers and hackers over the past few years. Since the beginning of this year alone, losses from hacks and rug pulls have surpassed $473 million across 108 incidents. This is a slight improvement compared to the same period in 2023 when losses exceeded $595 million. In May 2024 alone, losses due to hacks and fraud amounted to $52.4 million. This represents a 12% decrease from the nearly $60 million lost in May 2023 and a 28% decrease from the previous month. During this period, decentralized finance (DeFi) projects were predominantly targeted by attackers, with Ethereum and BNB Chains experiencing the highest losses.