Bittensor’s TAO Slides 15% After $8M Wallet Drain Attack

The blockchain was paused early Wednesday to contain the exploit, with security researchers suspecting a private key leakage.

AccessTimeIconJul 3, 2024 at 5:56 a.m. UTC
Updated Jul 3, 2024 at 5:59 a.m. UTC
  • The Bittensor blockchain was temporarily halted after an attack on several user wallets, causing a 15% drop in TAO prices.
  • Investigations are ongoing into the attack, which is suspected to have been caused by a private key leakage, and Bittensor has been put into "safe mode" to prevent further transactions until more information is available.

The Bittensor blockchain was temporarily halted early Wednesday as team members detected an attack on several user wallets, with at least one wallet drained of $8 million worth of the project’s TAO tokens.

TAO prices dropped as much as 15% in the aftermath of the attack, but slightly recovered as core members said steps were in place to mitigate further mishaps.

“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.

Later, co-founder Ala Shaabana confirmed on X that the chain was put on “safe mode,” meaning blocks were getting produced but no transactions were being processed. Blockchain trackers for the Bittensor network show the latest transactions and blocks were processed at or around 23:00 UTC on Tuesday.

Meanwhile, independent security researcher @ZachXBT said on his Telegram channel that one user was drained of 32,000 TAO, worth $8 million at the time, and suspected a private key leakage that led to the attack. A private key is a string of letters and numbers that acts as a password to protect and manage tokens in a wallet.

Investigations for the attack are ongoing as of Wednesday morning.

Bittensor connects machine learning models owned by various individuals worldwide. It is one of the biggest artificial intelligence-focused crypto projects with a market capitalization of $1.6 billion.

Edited by Parikshit Mishra.


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

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