Crypto Disaster: Thousands Of Solana Wallets Hacked

First it was the Bridge Protocol Nomad that was attacked at the start of the week. Now, the digital market has to deal with another major hit. 

In the early hours of Wednesday, August 3rd 2022, hackers attacked the Solana Ecosystem. This attack has rendered thousands of wallets empty and their owners in pain.

How Severe?

Currently, it is hard to give a very accurate report on the amount of damage inflicted. This is because of varying statistics from crypto analytic companies.

Blockchain forensic firm Elliptic gave its report on the incident and the extent of damage. Over $5.2 million in crypto-asset is missing so far, according to the company’s report. They also said that about 7,500 Solana wallets have been affected according to their findings.

Furthermore, security company PeckShield stated that about 4 Solana wallets drained $8 million from its victims.

The root cause is still not clear,” according to Elliptic’s co-founder, Tom Robinson. “It appears to be due to a flaw in certain wallet software, rather than in the Solana blockchain itself.” 

The attack sent Solana’s SOL token down as much as 7.3% to $38.40 in early trading on Wednesday, its lowest in a week. Bitcoin rose 1.3% to $23,327. 

The exploit affected users of a digital crypto wallet made by Slope Finance, according to a tweet sent Wednesday afternoon by Solana Status, a Twitter account managed by the Solana Foundation.

The tweet said that there is no evidence that Solana’s cryptography or protocol was compromised.

Slope confirmed in an official statement earlier today that a group of its wallet had been affected. The statement also indicated that the company’s founders and staff had also lost funds.

The crypto start-up has decided to conduct its own investigation on the issue.

Crypto Hacks This Year

The crypto projects seem to be providing a well of fortune for hackers. Consequently, the industry has suffered numerous attacks this year. 

Solana’s predicament comes a few days after Nomad lost close to $200 million in a security exploit on Monday. Nomad is a bridge protocol for transporting crypto tokens across different blockchains.

According to Elliptic, in 2022 alone, about $1 billion dollars was stolen from bridges.

Much remains unknown at this point — except that hardware wallets are not impacted,” Solana spokesman Austin Federa said.  

While there’s speculation the incident was a supply-chain attack, the nature of the exploit remains unclear. Supply-chain hacks occur when an outside party or provider with access to the victim’s systems and data is infiltrated.

Impact Of The Crypto Hack On Solana 

Solana, which has suffered network outages in the past, is a rival to the Ethereum blockchain. 

As transaction prices on Ethereum rose last year, chains like Solana, which tout their low transaction fees, emerged as alternatives for minting non-fungible tokens. The code underpinning Solana is also popular with clients looking to build their own decentralized-finance applications. 

Some NFTs were stolen in the hack – but the full impact of the exploit is still unclear, Elliptic’s Robinson said.

In other news, cryptocurrencies seem to be on the downside. Bitcoin currently trades at $22,897 and Ethereum $1,611. They are both down by 0.03% and 0.17% respectively. 

Solana is now at $38.72 which indicated a 0.05% drop from its original price. Cardano is up by 0.33%, bringing it to $0.5006.

Although the market looks steep, there are speculations that major coins will be on the rise. Is the crypto winter almost over? We’ll find out soon.