A Supply Chain Flaw Helped Hackers Steal Private Keys From Solana-Based Wallets
A massive hack has drained as much as $8 million from Solana-based wallets. Shockingly, the hack is still going on. Hackers have managed to steal millions of dollars from the crypto market over the past few years. Hackers stole more than $4 billion in cryptocurrencies in 2021 alone. As more people jump on the crypto bandwagon, the risk of such hacks is only increasing. Events like the Terra-Luna crash have already created an environment of extreme fear. But with the Solana wallet hack and other similar hacks, governments are likely to revisit their regulation policies regarding crypto transactions.
What Caused The Hack?
According to blockchain investigator PeckShield, the massive hack on August 2 was made possible due to a “supply chain issue.” Hackers were successful in exploiting the issue to steal the private keys of users. The hack is successful in “draining wallets across the Solana ecosystem,” said Magic Eden.
According to the ongoing conversations on Twitter, the hackers were able to siphon off over $6 million in a matter of just 10 minutes. A Phantom wallet user with $500,000 of USDC in their account is said to be one of the biggest victims of the hack. Shockingly, the wallet associated with the breach was funded by hackers via Binance seven months ago. Since then, the wallet had remained dormant until the attack happened. Around 8,000 wallets are reportedly affected by the hack. Also, the count of affected wallets is increasing at a rate of 20 per minute, said Ava Labs CEO Emin Gun Sirer.
Big Question On The Security Of Custodial Wallets
Crypto experts and security analysts have been raising serious concerns over the security of custodial wallets. While custodial wallets make crypto transactions more accessible, they are the central authority controlling the funds of all the users. This is one of the biggest advantages associated with custodial wallets. Also, the lack of awareness among new users about non-custodial wallets makes them easy prey to such hacks. Further, mainstream exchanges are doing little about educating new crypto users regarding safe investment strategies.
It is high time that top exchanges and regulators make people aware of the importance of hardware wallets and storing private keys offline. The last few years have taught us that hacks and breaches are inevitable. However, their impact can be surely minimized with proper education and an increasingly aware trading environment.