TAO Slides 12% After Hacker Drains $8M From Bittensor

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The decentralized AI project Bittensor was compromised on Wednesday, leading to an attack on several accounts on the blockchain. Among the attack wallets, an address lost at least $8 million, according to on-chain analyst ZachXBT.

Following the unusual activity, the Bittensor team temporarily halted operation, putting the network in safe mode. The project’s website showed that it produced the last block by 12 am UTC+1.

The exploitation also saw the network’s token TAO slide sharply by 12%. TAO fell to as low as $225 before recovering slightly following news the Bittensor team had the issue under control.

Bittensor Acknowledges Attack

The Bitterensor team acknowledged the suspicious attack, noting it was investigating the situation.

“We are investigating what appears to have been an attack on a number of Bittensor wallets over the last 3 hours. 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,” an administrator said in the project’s Discord channel.

Bittensor’s co-founder, Ala Shaabana, further confirmed the attack, alleging that the project was still producing blocks but not processing transactions.

“By way of an update, we have contained the attack and put the chain into safe mode (blocks producing, but no transactions are permitted). We’re still mid investigation and are considering all possibilities. Stay tuned,” Shaabana tweeted.

Potential Private Key Leak

Reacting to the attack, ZachXBT noted that it was due to a private key breach. He alleged that the hacker potentially accessed the private key of one of project’s developers to carry out the security breach.

The analyst also stated that one wallet lost 32,000 TAO ($8 million) from the attack, among other unconfirmed fund losses. At press time, the Bittensor team has not released a detailed report on the attack.

The post TAO Slides 12% After Hacker Drains $8M From Bittensor first appeared on Cointab.