Solana Wallets Targeted in Latest Multimillion-Dollar Hack Again

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Solana Wallets Hacked Again

Users claim that their funds have been taken from well-known internet-connected "hot" wallets like Phantom, Slope, and TrustWallet without their knowledge, making the Solana ecosystem the target of cryptocurrency's most recent exploit.

Blockchain auditors OtterSec report that the attack is still active and that over 8,000 wallets have already been compromised. A number of Solana addresses have been connected to the attack (1, 2, 3, 4), and those wallets amassed SOL, SPL, and other Solana-based tokens valued at at least $5 million from unwary users.

The precise reason for Tuesday's attack remained unknown the entire night, but it appears to have primarily affected people who use mobile wallets. A trusted third-party service may have been compromised in a so-called supply chain attack if the attacker managed to sign (i.e., initiate and approve) transactions on the users' behalf.

According to a tweet from SolanaStatus, engineers from various networks have discovered that the bug is not related to the Solana core code but rather to software used by several software wallets.

The attack will unavoidably reignite a long-running discussion about the security of hot wallets, which are used by users to send, store, and receive cryptocurrency and are always online. Cold wallets are hailed as a more secure, albeit less practical, alternative. These USB drives must be plugged into a computer to sign transactions.

"We are investigating the Solana wallet incident and coordinating closely with other teams within the ecosystem to find out what happened. Once we have more information, we will release an update, a Phantom representative, the biggest Solana hot wallet, said in a statement to CoinDesk. "The team does not currently believe that this is a Phantom-specific issue."

Although this connection grew less obvious as the attack progressed, some users initially believed the hack might be connected to transactions on Magic Eden's Solana-based non-fungible token (NFT) marketplace. In order to prevent attacks, the market tweeted a warning asking users to revoke permissions from its wallet. Additionally, users were advised to "[m]ove everything to a cold wallet/ledger."

Twitter is still flooded with complaints from Solana users who discover that tokens have mysteriously vanished from their accounts.

The Solana community member @gostak gm told CoinDesk, "I was getting my sunglasses repaired when I got a push notification from my mobile wallet that I had sent all the SOL from my wallet. It was my primary hot wallet, so I connected it to numerous dapps, mobile wallet providers, and web wallet providers. It's unclear to me what the underlying cause might have been. I'm content that most of my money is in a cold wallet.

At this time, it's not clear if the vulnerability only affects the Solana blockchain. Users of the Slope and TrustWallet wallets both reported losing USDC on Solana and Ethereum.

Due to its quick transactions and affordable fees, Solana, the fifth-largest blockchain by total value locked (TVL), has gained popularity over the past year. In the hours after the attack, SOL, the native token, fell 4%.