Bittensor’s TAO tanks 13% after a $8M crypto hack

The Bittensor blockchain team detected an attack on several user wallets, temporarily halting the system. Unfortunately, one wallet was drained of $8 million worth of the project’s TAO tokens. According to Bittensor’s block explorer, the most recent block was confirmed approximately 7 hours ago.

According to on-chain analyst ZachXBT, the announcement mentioned a possible connection between the thefts and leaked private keys. “Bittensor was halted due to additional thefts earlier today potentially as a result of private key leakage,” he explained in a Telegram update.

Bittensor wallets hacked – ZachXBT

ZachXBT reports that the foundation’s decision to safeguard the network against future incidents was likely due to the theft of $8 million worth of TAO, which is equivalent to approximately 32,000 native Bittensor (TAO) tokens.

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In June, ZachXBT also reported another Bittensor hack. He noted that “A TAO holder had $11.2M (28.2K TAO) stolen (https://x.taostats.io/extrinsic/3086433-0007) from them on June 1, 2024.”

The attacker bridged the stolen funds to Ethereum and has been selling TAO for ETH and USDC. As of now, they have 12.4K TAO ($5M) remaining and have been transferring USDC/ETH to Whitebit, HTX, & Binance.

ZachXBT

According to reports, investigations are ongoing into the attack, which is believed to have been caused by a leakage of private keys. As a precautionary measure, Bittensor has been put into “safe mode” to halt further transactions until more information becomes available.

Source: X – From TAO’s co-founder Ala Shaabana

The purported decentralized AI project adds, “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.”

TAO market performance

TAO prices dropped significantly, up to 15%, following the attack, but there was a slight recovery as core members reassured investors that measures were being taken to prevent future incidents. Bittensor core team member wrote on the project’s Discord channel that:

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.

Bittensor.

TAO fell by 13% following the hacking of TAO validators, which resulted in the chain being suspended for investigation. Bittensor (TAO) is currently valued at $236.10, representing a 1.0% increase from one hour ago. Today, the value of TAO is 16.8% lower than it was seven days ago.

Cryptopolitan reporting by Florence Muchai