• Cosmos Hub may have major security issues in its LSM as reported by its builder AiB.

  • AiB recommends a complete audit to the Cosmos ecosystem to combat security concerns.

The crypto market has sustained its positive momentum as the sector surges with activity. Bitcoin has hit $67,000, mirroring the US spot Bitcoin ETFs, which have shown significant inflows. Meanwhile, All in Bits, the builder of the Cosmos ecosystem, announced a major security alert a few hours ago. 

According to the DeFi builder’s X post, it has uncovered serious security issues on the Cosmos hub’s Liquidity Staking Module (LSM). All in Bits (AiB) discussed several concerns for raising the emergency security alert. Firstly, the LSM’s code was written by North Korean agents. This has caused concern after recent reports of skepticism and infiltrations surrounding the group. 

Additionally, AiB pointed out that Cosmos Hub’s LSM is not a standalone module but part of other staking and distribution modules. This would mean that a security threat could affect the entire ecosystem. Furthermore, the builder also highlighted two individuals involved in the projects and their misrepresentations of material.  

All in Bits has also said that other firms such as Stride Labs and Informal Systems have shown a lack of transparency in the project. Finally, AiB also reported discovering vulnerabilities in the slashing process, that allows validators to evade it persisting. 

What Upcoming Steps Does AiB Recommend for Cosmos Hub? 

In order to combat the security concerns, AiB recommends an immediate fix of the major vulnerability surrounding the staking LSM. It also states that the Cosmos Hub should ensure an immediate audit of its various systems within the ecosystem. Notably, before the LSM was incorporated into the hub it underwent a 19-month audit. Despite this, there were some unaudited codes within the LSM. 

Moreover, the protocol builder also states that involved parties who contributed to the security concerns must be subjected to appropriate actions. Finally, it also has demanded the respective parties to account for their actions in its detailed announcement. 

In the recent few months, several security concerns and breaches have risen in the cryptocurrency sector. Recently, the Pendle ecosystem encountered a hack in its Penpie protocol, an optimization tool. The Polygon ecosystem’s Discord channel was also hacked in August. 

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