Comment A pair of crypto hacks totaling nearly $200 million in losses and possibly affecting more than 10,000 users has sparked concern in an industry already unsettled by falling prices. On Wednesday, Solana, a popular blockchain and token, said some wallets holding its assets had been hacked. At least 7,700 such wallets are believed to be affected, the company said, while London-based blockchain analytics firm Elliptic put the amount stolen at $5.2 million in crypto, which includes Solana tokens and the stablecoin known as USD. “An exploit allowed a malicious actor to drain funds from various wallets in Solana,” the company said via Twitter. “Engineers are currently working with multiple security researchers and ecosystem teams to identify the root cause of the exploit, which is currently unknown.” The hack is believed to have hit wallets like Slope and Phantom. These are “hot wallets” — that is, wallets that enable lightning-fast transactions because they are always online, unlike “cold wallets,” which typically require a USB drive and have long disconnection periods. Solana — once the fifth most popular token before a slide — has made a name for itself as a blockchain that can move money extremely quickly. The news follows Monday’s disclosure by Nomad, a so-called blockchain bridge, which acknowledged that it had been siphoned off about $190 million after a hacker broke into its system. The attack was known as a “free-for-all” because the hacker’s original code allowed anyone to copy it and steal the encryption for themselves. It is not known where the money went. Nomad said its executives were working with law enforcement and a blockchain data firm called TRM Labs to trace the funds, without an update as of Wednesday afternoon. He said they were working on “research/recovery” as well as “technical fixes.” In an unusual move, the company early Wednesday provided an address for anyone who might choose to grab the money in a noble act of protection. “Dear white hat hackers and ethics researcher friends protecting ETH/ERC-20 tokens, please send the funds to the following ethereum wallet address,” he tweeted. It is not known if any good Samaritans took the company up on its offer. A blockchain bridge allows consumers to exchange crypto from one blockchain to another — say, from bitcoin to ethereum — making it vulnerable to what security experts call “both sides,” weaknesses in each blockchain. These bridges also tend to be newer and, in some cases, more hastily designed. In March, another blockchain bridge known as Ronin was hacked for sums totaling more than $600 million in crypto. “To date, approximately $1.8 billion has been stolen from these services, and it is concerning that their security standards do not seem to match the huge amounts of capital entrusted to them,” said Tom Robinson, Elliptic co-founder and chief scientist. . in an email to the Washington Post, referring to bridges. Meanwhile, the Solana case has caused concern because it was made vulnerable by factors beyond its control. While some argue that the hack doesn’t show that any of the industry’s foundations are shaky — “This wasn’t a core blockchain problem, it probably looks like an app that someone built was buggy,” crypto mogul Sam Bankman told Fortune — Fried on Wednesday – emphasized to critics the interconnectedness of crypto networks and the inability of one party to fully control all others. While the hacks involved discrete entities, blockchain bridges and hot wallets also highlight what many crypto enthusiasts say is so appealing about the format: ease of use. The first allows disparate blockchains to communicate—potentially as essential to a coming age of technology as, say, people with AT&T and Verizon phone plans being able to talk to each other was to an earlier one. And cold storage, while safer, seems to undermine what lies at the heart of crypto’s appeal, which is to enable transfers without the delays and waits of traditional banking. On social media on Wednesday, many showed images of their wallets suddenly showing zero balances, while others questioned the hot wallets. “So you’re telling me that storing my entire fortune in a google chrome extension would be considered a bad move?” a wag wrote about Phantom. But experts say the issue may be more serious than that. Finding solutions, they note, may mean making sacrifices within the goals envisioned by cryptoidealists. “One of the advantages to opening up the banking system in this way is the speed and lower barrier to transactions,” said William Callahan III, a former special agent with the Drug Enforcement Administration who now serves as director of government and strategic affairs for a company called Blockchain Intelligence Group. “But what these hacks show is that we need to step back and question this idea of accessibility, as speed is also part of the problem. We have to balance speed with safety.” Still, Callahan said, he believed such a boost was possible. “Blockchain bridges need to step up their protection, while perhaps consumers need to use more cold storage,” he added. The need for speed may be waning on its own as some people get out of cryptocurrencies. Bitcoin, a powerful barometer of crypto activity, has lost 50 percent of its value in 2022 as investors have dumped the asset, although it has rebounded from under $19,000 in June to around $23,000 in recent weeks .
