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Phantom Wallet Exploit Drains Millions in SOL Tokens

Over eight thousand “hot” web-based crypto wallets have been compromised so far, but the origin of this attack remain unknown.

The latest attack targeting the Solana crypto ecosystem is attributed to an exploit in tandem with the draining of funds from hot online crypto wallets including Phantom, Slope, and TrustWallet.

The wallet attack continues, and more than 8,000 wallets have been compromised thus far, the leaders of OtterSec reported. At least $5 million worth of Solana SOL, SPL, and other Solana-based tokens have been stolen.

“The core of the attack is a function in the wallet software that allows miners to generate private keys and access funds. This was exploited in tandem with a feature designed to drain funds from hot wallets, which would then be sent to an address controlled by the attacker,”

Otter Security

At the time, the exact cause of Tuesday evening’s attack remained unknown, except that it seems to have primarily affected users using cryptocurrency wallet apps. It is possible that a cyberattack on a trusted third-party service allowed the assailant to sign (i.e., initiate and approve) cryptocurrency transactions.

Engineers from various networks, including Solana Core, have determined that the bug is not found with the core code, but in the software of several software wallets.

The debate will reignite owing to a previous dispute that leveraged security risks connected with the insecure storage of cryptocurrency. Experts have backed cold storage wallets, USB flash drives that need to be plugged into a computer to sign transactions, since they’re regarded as the more shielded, although less convenient, choice.

We are working out for Solana to analyze the incident regarding Phantom hot wallets and update the public once we have more information. We do not consider it to be a unique issue for Phantom at this time noticed a representative of Phantom.

Some users thought the attack may have been related to transactions on the Magic Eden’s Solana-based NFT marketplace, but this connection becomes increasingly clear as the investigation progresses.

The Magic Eden alert to customers to be sure to revoke cryptocurrency wallet permissions for suspicious hyperlinks to avoid getting caught. At the same time, it recommended customers “transfer everything to a cold wallet or ledger”.

Several Twitter users are complaining that their accounts have been drained of some of the coins that have been stored on them.

According to one TrustWallet and Slope wallet user, funds have been lost on both Solana and Ethereum.

According to DefiLlama, Solana is the fifth-largest blockchain by total value locked (TVL). However, its native token, SOL, dropped 4% in the hours following an attack. 

This is newsworthy because it is unusual for such a large blockchain to be attacked. It is also newsworthy because the value of SOL dropping 4% is significant. 

Solana is a project that is building an ecosystem of decentralized applications. Its mainnet went live in March 2020. 

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