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Bittensor developers have temporarily suspended the network following a suspected security exploit that affected several wallets. According to on-chain analyst ZachXBT, the incident involved the leaking of private keys, which would have resulted in unauthorized access and possible cryptocurrency theft.

A Discord admin for the Bittensor community, known as const [т, T]announced that the exchange has paused all transactions. The aim of this measure was to prevent unauthorized access while the team investigates the issue.

Co-founder Ala Shaabana confirmed on Twitter that the blockchain is in “safe mode,” allowing blocks to be produced but halting all transactions. Blockchain traces from the Bittensor network show that the last transactions and blocks were processed around 23:00 UTC on Tuesday.

“As we are prioritizing this issue for the rest of this week, we will not be releasing any regular software updates to the Bittensor software or to any chains on the mainnet or testnet until we have brought the blockchain fully back online,” the team said.

Bittensor suffers attack and pauses transactions

ZachXBT reported on his Telegram channel that the attack resulted in the theft of approximately $8 million worth of TAO tokens — equivalent to about 32,000 tokens. According to him, the theft was due to a leaked private key:

“Bittensor has been disrupted due to additional thefts earlier today potentially as a result of a private key leak.”

As a result of the security incident, the price of Bittensor’s native token, TAO, fell from $272 to $236, according to data from CoinGecko. In other words, the cryptocurrency saw a drop of more than 13% in about 24 hours.

TAO Native Token Price Chart – Source: CoinGecko
TAO native token price chart. Source: CoinGecko

This incident is not the first to affect the project. After all, in June of this year, a user of the platform lost more than 28,000 tokens, valued at around $11.2 million, due to a phishing attack. Crypto “detective” ZachXBT explained that the attacker divided the stolen funds across 18 different wallet accounts, which were later consolidated into 16 accounts.

These accounts transferred the tokens from the TAO network to Ethereum, later exchanging them for ETH and USDC stablecoins on three different decentralized exchanges.

Cryptocurrencies continue to be targets of attacks and scams

Cryptocurrency projects have been a constant target for scammers and hackers in recent years. Since the beginning of this year, losses due to hacks and fraud have exceeded $473 million across 108 incidents. This represents a slight improvement compared to the same period in 2023, when losses exceeded $595 million.

In May 2024 alone, losses due to hacks and fraud totaled $52.4 million. This figure represents a 12% decrease from the nearly $60 million lost in May 2023 and a 28% decrease compared to the previous month.

During this period, decentralized finance (DeFi) projects were predominantly targeted by attackers, with the Ethereum and BNB Chain blockchains suffering the most losses.

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