Home Altcoins News Bittensor’s TAO Price Plummets 13% After $8 Million Crypto Hack

Bittensor’s TAO Price Plummets 13% After $8 Million Crypto Hack

TAO token

Bittensor’s TAO Token Hits a Rough Patch Following Major Security Breach

Bittensor’s TAO token has experienced a significant drop in value following a major security incident. On July 3, 2024, Bittensor developers halted the blockchain after discovering a massive exploit targeting several user wallets, leading to a substantial loss of funds.

$8 Million Theft Causes TAO’s Price to Tumble

The Bittensor team was forced to put the blockchain into “safe mode” after it was revealed that a hacker had stolen $8 million worth of TAO tokens. According to on-chain analyst ZachXBT, the theft involved the draining of approximately 32,000 TAO tokens from one of the project’s wallets. This breach not only led to the immediate suspension of transactions but also caused a notable decline in TAO’s market price.

Following the news of the hack, the value of TAO dropped by about 13%, reflecting widespread investor concern over the security of the Bittensor network. At the time of writing, TAO’s price stands at $236.10, marking a slight recovery of 1.0% from an hour ago but still representing a 16.8% decrease over the past week.

ZachXBT reported that the suspected cause of the breach is the leakage of private keys, which may have compromised several wallets. In a Telegram update, he explained that the attack’s connection to these leaked keys was a critical factor in Bittensor’s decision to halt all blockchain transactions.

Bittensor’s Response to the Attack

In response to the attack, Bittensor’s core team acted swiftly to contain the damage and investigate the breach. The developers have put the network into “safe mode,” effectively pausing all on-chain activities while they work to understand the nature of the attack and prevent further losses.

Ala Shaabana, co-founder of Bittensor, provided an update on the situation through X (formerly Twitter), stating, “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.” This step reflects the team’s commitment to safeguarding the network and addressing the security vulnerabilities exposed by the hack.

The Broader Impact of the Hack on Bittensor’s Ecosystem

The security breach has had a ripple effect on TAO’s market performance and investor confidence. The immediate 13% drop in TAO’s price highlights the volatile nature of the cryptocurrency market, where security incidents can lead to significant financial repercussions.

In June 2024, Bittensor had already been the target of another hack, which saw a TAO holder lose $11.2 million worth of tokens. The recurring nature of these security issues has raised questions about the robustness of Bittensor’s security measures and the effectiveness of their responses to such incidents.

ZachXBT’s recent analysis also revealed that the stolen TAO tokens were bridged to Ethereum and sold for ETH and USDC. As of now, the attacker still holds around 12,400 TAO tokens, worth approximately $5 million, and has been transferring funds to various exchanges, including Whitebit, HTX, and Binance.

Future Outlook for Bittensor and TAO

Looking ahead, the Bittensor team faces the dual challenge of addressing the security flaws revealed by the hack and restoring investor confidence in the project. The ongoing investigation will be crucial in determining the full extent of the breach and implementing measures to prevent future incidents.

In the meantime, TAO’s market performance will likely remain volatile as the community and investors await updates on the investigation. The price drop following the hack serves as a reminder of the risks associated with investing in the rapidly evolving cryptocurrency space, where security breaches can have far-reaching impacts.

As Bittensor works to resolve the current crisis, the future of TAO will depend on the effectiveness of their response strategies and their ability to strengthen the security of their blockchain infrastructure.

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Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

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