One of the biggest stories this week in the crypto world revolves around the Solana (SOL-USD) network. Recently, a Solana hack cost millions of dollars worth of assets, affecting thousands of users. But one of the most interesting aspects of this news is that most didn’t have any idea how the hacker moved all of these assets. Today, however, a theory is arising. Some are linking the hack to the Slope hot wallet.
Starting Tuesday evening, a hacker recently unloaded wallets across the Solana network. The thief was able to access thousands of wallets throughout the evening and into the night, collecting SOL coins and a host of Solana-native tokens. This hack continued throughout Wednesday morning as well. Luckily, investors had become aware of the attack shortly after it happened. This gave those who hadn’t yet been targeted an opportunity to move their holdings off-chain.
In all, the hacker was able to take over $6 million worth of crypto from nearly 9,000 different wallets. But even after the attack occurred, investors were confused; how exactly was this bad actor able to perpetrate the scheme?
This morning, Solana developers are denying the hack involved compromising the Solana network itself. Rather, it must have affected users of certain hot wallets. Evidencing this theory were claims by some users that they had lost Ethereum (ETH-USD) assets as well.
Specifically, Solana’s developers blame the attack on the Slope crypto wallet. Slope is one of the more popular mobile hot wallets on the Solana network; developers say users with Slope wallets and Slope-tied Phantom wallets make up the brunt of users affected by the hack. Slope developers seem to have confirmed this theory today as well. The company says it isn’t yet sure of the scope of the attack.
Solana Hack Highlights Crypto Market Insecurities, Hot vs. Cold Wallet Debate
The Solana hack news is certainly aggravating investors. Indeed, the attack isn’t even the first or last crypto hack of the week. The news highlights a growing issue with the crypto market — one in need of immediate addressing — and re-sparks a debate over wallet convenience versus safety.
As we move through the second half of 2022, investors have already suffered significantly more crypto theft than all of 2021. Billions of dollars have been stolen so far, with billions more expected to be taken. This week’s hacks add to the growing pile, but they also see hackers focusing on more high-profile targets, given Solana’s status as one of the biggest layer-1 networks.
If the industry hopes to move forward in its effort to infiltrate the mainstream, losing more and more assets to scams and hacks each year is making for some major setbacks. Companies must prioritize security; a variety of blockchain cybersecurity companies exist, from CertiK to Chainalysis. These companies can offer up plenty of security services, including coding audits that root out weaknesses commonly exploited by thieves.
It’s also investors’ responsibilities to protect their assets, especially as they note the increasing frequency of hacks. Much debate is had over hot wallets versus cold wallets regarding the rise in crypto theft. The Solana hack, like other hacks targeting wallets, exclusively went after hot wallets. That’s because hot wallets hold assets on the internet, where they are readily accessible by a bad actor. While more inconvenient, cold wallets are a lot safer because they take assets offline. No cold wallet can lose assets to hacks like the Solana attack.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.