Altcoin in Turks’ Basket Falls With ‘Wallet Hack’!

In a hacking scandal brought up by on-chain detective ZachXBT, it was suggested that a popular altcoin project was ignoring ongoing vulnerability issues.

Among the top 50, this altcoin project ignores security vulnerabilities

@ceoleeparsons, who describes himself as an “on-chain detective” on Twitter, claimed that Algrorand users lost millions of dollars from hack attacks. The highlight is that the Algrorand team did not interfere with the security vulnerabilities, kept the incident secret and did not make any effort to save the aggrieved investors.

“You clowns, how about really acknowledging and helping the ongoing attack that has stolen millions from community members?” wrote @ceoleeparsons under the tweet where Algorand introduced its new CFO yesterday. On ZachXBT, an on-chain detective platform that investigates hack incidents, he raised the issue of Algorand’s “denial” of the ongoing wallet draining hack. Supported what @ceoleeparsons said by retweeting it.

Mysterious wallet emptying operations

Wallet provider MyAlgo issued a critical statement on February 27 advising all users to withdraw funds from Mnemonic wallets stored on MyAlgo. The message acknowledged “recent hacking attacks” and stated that the root cause of the trust gap is still unknown.

The attacks happened more than a week ago and there has been no further movement since.

9.2 million dollars lost

Digging deeper into the matter, ZachXBT suspects hackers seized $9.2 million, mainly 19.5 million ALGOs and 3.5 million USDC, between February 19-21. More than a week after MyAlgo’s initial warning, ZachXBT denounced Algorand for its inaction in closing off the attacker’s exit routes. He added that the neglect of society shown was unacceptable:

Combining tweets from victim Algorand owners, ZachXBT says that as of March 7, wallet emptying is still ongoing.

The Algorand team responds

On March 6, the Algorand Foundation acknowledged the issue by summarizing the situation. He said investigations did not reveal protocol or software development kit vulnerabilities. It also confirmed that MyAlgo has been contacted and that the wallet provider has not identified any vulnerabilities. But investigations continue.

Algorand CTO John Woods has released a video on wallet security focusing on how crypto wallets work from a technical standpoint. He advised users to store funds in a hardware wallet because of its superior protection over other types of wallets: “the key never leaves the hardware wallet; the hardware wallet does not have the physical ability to export the key via the USB interface.”

Woods said he cares about his and Algorand’s community being affected by fraud and theft. MyAlgo has asked the community to be patient while vulnerabilities are being identified. However, ALGO, which is at the center of the hacking events, is experiencing selling pressure from anxious investors.

ALGO price drops while altcoin market is flat

Ranked 37th by market cap, Algorand is trading in the red around 3% amid the hacking agenda. For comparison, Bitcoin and Ethereum were trading sideways below 0.5%.

As Kriptokoin.com, we have included the February hack report of the DeFi market in this article. One of the well-known projects that came to the fore with hacking events last week was Sandbox.