We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Hackers targeted the Solana ecosystem early on Wednesday, with thousands of wallets affected in the latest hit to the cryptocurrency market after bridge protocol Nomad was attacked at the start of the week.

Estimates of the damage vary. Just more than $5.2m in cryptoassets have been stolen so far from more than 7,900 Solana wallets, according to blockchain forensics firm Elliptic. Security company PeckShield said four Solana wallet addresses drained about $8m from victims.

“The root cause is still not clear,” Elliptic’s co-founder Tom Robinson said. “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 was up 1.5% at $23,367.

Crypto projects are proving a rich vein for hackers and the industry has suffered numerous attacks in 2022. Solana’s woes come days after Nomad — a bridge protocol for transferring crypto tokens across different blockchains — lost close to $200m in a security exploit on Monday. More than $1bn has already been stolen from bridges in 2022, according to a June report by Elliptic.

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

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

Solana, which has suffered network outages in the past, is a rival to the ethereum blockchain. As transaction prices on ethereum rose in 2021, chains such as Solana, which tout their low transaction fees, emerged as alternatives for minting non-fungible tokens (NFTs). The code underpinning Solana is also popular with clients looking to build their own decentralised-finance applications. 

Some NFTs were also stolen in the hack, but the full effects of the exploit are still unclear, Elliptic’s Robinson said.

Bloomberg News. More stories like this are available on bloomberg.com


Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.