Bittensor blockchain suspended after attack that resulted in the loss of at least 8 million dollars from user wallets and caused a 15% drop in the price of TAO tokens.
The Bittensor team activated the ‘secure’ mode, suspending transactions to contain the attack and conduct a thorough investigation.
Preliminary investigations suggest a private key leak as the cause of the attack, severely impacting the security and trust in the project.
The Bittensor blockchain was temporarily suspended on Wednesday morning following an attack targeting multiple user wallets, resulting in a 15% drop in the price of TAO tokens.
Early investigations indicate a possible private key leak, prompting the Bittensor team to put the blockchain in ‘secure’ mode to prevent further transactions until the situation is better understood.
Bittensor, an artificial intelligence-focused project, connects machine learning models owned by individuals worldwide. With a market capitalization of $1.6 billion, Bittensor is one of the largest AI-focused cryptocurrency projects.
Suspension of the Bittensor blockchain
On Wednesday morning, the Bittensor team detected an attack on multiple user wallets, with at least one wallet drained of $8 million worth of TAO tokens. To contain the attack, the blockchain was temporarily paused. This decision was taken as a precaution to allow investigators to determine the exact nature of the attack without risking further losses.
Reactions and Measures Taken
Following the attack, the price of TAO tokens dropped by 15% before stabilizing slightly due to measures taken by the core Bittensor team. A team member announced on the project’s Discord channel that on-chain transactions had been completely halted until more information becomes available.
This decision was later confirmed by co-founder Ala Shaabana on X, stating that the chain was in ‘secure’ mode, with blocks still being produced but no transactions being processed.
Ongoing Investigation on the Bittensor Hack
Initial investigations suggest a private key leak as a possible cause of the attack. ZachXBT, an independent on-chain detective, reported on his Telegram channel that a user had lost 32,000 TAO tokens, valued at $8 million at the time of the attack. Private keys, composed of alphanumeric strings, serve as passwords to protect and manage tokens in a wallet. The leak of these keys would have allowed attackers to access users’ funds.
