Bittensor Wallet Breach of $8M Shakes Crypto Market, TAO Token Plummets 15%

Key Takeaways:

1. Significant Financial Loss: Bittensor experienced a security breach resulting in the theft of $8 million worth of TAO tokens, causing a 15% drop in token value.
2. Immediate Network Suspension: Bittensor suspended its network operations to investigate the breach and prevent further unauthorized transactions.
3. Ongoing Investigation: The Bittensor team is actively working to resolve the security issues, but as of now, there has been no official statement from the Opentensor Foundation regarding the incident.

YEREVAN (CoinChapter.com) — Bittensor, a decentralized AI project, has experienced a significant security breach, resulting in an $8 million loss. This breach affected several users’ wallets and led to the theft of approximately 32,000 TAO tokens. The incident caused a 15% drop in the token’s value, from $281 to $234.

On-chain analyst ZachXBT noticed unusual transactions, suggesting that leaked private keys might be the cause. In response, Bittensor’s community Discord administrator announced that all transactions were halted to prevent further unauthorized actions while the situation is being investigated.

Network Suspended to Investigate Wallet Breach

Jacob Robert Steeves, co-founder of Bittensor Network, confirmed the network’s suspension. He explained,

“The suspension of the network is because developers are looking into some issues as they work to resolve them.”

The team stated that the network’s security is their top priority. They are assessing the breach and working on resolving the vulnerabilities.

The Discord community administrator, known as “const,” stated,

“We are looking into what seems to have been an attack on the Bittensor wallets over the last 3 hours: […] All chains are paused until further notice.”

This immediate response aimed to secure the network and prevent further unauthorized transactions.

TAO Token Plummets 15% After Hack, No Official Statement Yet

The breach had a swift and severe impact on the market. Data from Taostats revealed that the TAO token’s price dropped nearly 15% in one day. As of now, the Opentensor Foundation, which developed the Bittensor protocol, has not released an official statement regarding the hack.

Bittensor uses blockchain technology to create a decentralized platform for developing, training, and exchanging AI models. The TAO token incentivizes participants to contribute computational resources and data to the network’s AI training processes.