August 18, 2022

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Solana users suffer $5.8 million exploit; developers point to Slope wallet as potential cause

Crypto wallet Slope might be the weak link behind an exploit that resulted in over $5.8 million in funds being drained from user accounts this week, according to backers of Solana, a blockchain that serves as a foundation for Slope and several other impacted digital wallets. 

Starting Tuesday, customers of several crypto wallets, including Phantom and Slope, saw digital funds valued in the millions begin to evaporate from their online accounts. Developers of the Solana blockchain, used by both Slope and Phantom, said on Wednesday the incursion may have started at Slope.

“After an investigation by developers, ecosystem teams, and security auditors, it appears affected addresses were at one point created, imported, or used in Slope mobile wallet applications,” Solana Foundation tweeted Wednesday. 

Details of “exactly how this occurred are still under investigation, but private key information was inadvertently transmitted to an application monitoring service,” Solana’s developers said.

Representatives at Slope didn’t immediately respond to a request seeking comment.  

The latest estimate of the digital heist had it involving $2.6 million of stablecoin USDC
USDCUSD,
-0.01%,
$1.8 million of Solana’s SOL
SOLUSD,
-2.85%
token and $1.4 million of other coins depleted from 7,947 wallets, according to blockchain analytics firm Elliptic.

The attack comes as bitcoin
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-2.31%,
the world’s largest cryptocurrency, has been attempting to rebound from a devastating fall from its peak. Bitcoin was down 51.2% on the year through Wednesday, according to FactSet.

Earlier in the week, crypto protocol Nomad, which allows users to transfer crypto across different blockchains, said it lost almost $200 million on Monday in a security hack, further exposing risks in the fledgling digital asset industry. 

Related: Hear from Mike Novogratz at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The Galaxy Digital CEO has ideas about navigating the crypto winter.