Algorand advises users to withdraw funds following $9.2 million wallet breach

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Key Takeaways:

  • MyAlgo, a provider of Algorand wallets, advised customers to withdraw their money while the project looked into the cause of the most recent $9.2 million hack.
  • John Woods reaffirmed that neither the protocol nor the Software Development Tools is flawed.

MyAlgo, a provider of wallets for the Algorand network, has advised its users to withdraw money from any wallets made with a seed phrase due to an ongoing exploit that has resulted in the theft of money believed to be worth $9.2 million.

On February 27, MyAlgo tweeted the recommendation and the statement that it is still unsure of what caused the recent wallet breaches and urged everyone to take precautions to safeguard their assets.

There had been a targeted attack that appeared to have been carried out over the previous week on several well-known MyAlgo accounts, the team had tweeted earlier on February 27, warning about the attack.

According to MyAlgo, users who had mnemonic wallets with the key saved in an internet browser were particularly vulnerable to the exploit. A private key is usually generated by a mnemonic wallet using between 12 and 24 words. It would keep collaborating with law enforcement and conduct a thorough investigation to ascertain the underlying cause of the attack. MyAlgo added:

“Do not rush things and make sure you are transferring funds or rekeying accounts in a safe manner. The attacks happened over one week ago, and no other movements have taken place since then.”

On February 27, the Algorand Foundation’s chief technology officer, John Wood, tweeted that the hack had impacted approximately 25 accounts. However, he added that neither the Algorand protocol’s software development kit nor the exploit is the cause of any fundamental problems.

ZachXBT, an on-chain sleuth, revealed in a tweet that the crypto exchange ChangeNOW was able to freeze about $1.5 million in assets, and it is believed that over $9.2 million in assets have been stolen as the result of the exploit.

On February 27, the developer collective, which focuses on Algorand, published a study that ruled out several potential attack vectors like malware and operating system flaws. According to the report, the “most likely” scenarios involved either targeted exfiltration of unencrypted private keys from MyAlgo’s website or socially engineered phishing attacks that compromised the affected users’ seed phrases.

A recent exploit, according to LaunchZone, a DeFi protocol built on the BNB Chain, caused $700,000 in funds to be removed from its liquidity pool, driving down the value of its native token.

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