The South Korean-based blockchain development company Fantom Foundation has suffered a malicious attack that resulted in the loss of assets worth approximately $550000. In X post, the Fantom team regretted that the hacking activities exposed the customers to substantial loss of assets.
The report indicated that the Fantom team has initiated a recovery plan that involves extensive investigation to identify the bad players. The exploit has forced the troubled blockchain firm to develop effective measures to ensure the remaining assets are safe and secure.
Fantom Foundation Hacked
In a subsequent announcement, the Fantom team argued that 99% of the remaining funds were out of danger. After analyzing the incident, the Fantom team noted that its block explorer mislabelled some wallets under the “Fantom: Foundation wallets” category.
The erroneous labeling shielded some of Fantom wallets from the exploit. The hacking came days after the Fantom Foundation had changed the ownership of some of the wallets.
During the transition, the Fantom key stakeholders, including the staff, owned some of the wallets. The changes forced Fantom to remove the company funds from the wallets.
Unknowingly, days after the change in ownership, the Fantom team suffered a malicious attack that resulted in financial losses. The blockchain company noted that October 17 hack affected the wallets that the employees recently acquired. The attack has compelled Fantom to probe the matter to identify the system vulnerability connected to the hack.
Hackers Drain $550K from Fantom Hot Wallet
Also, the blockchain firm seeks to conduct an independent investigation in partnership with a blockchain intelligence firm TRM Labs. In a separate report, the blockchain security researchers stated that the hackers escaped with around $7 million.
The researcher’s findings validate an analysis from Spreek, an on-chain investigating company. In a Telegram post, the Spreek investigators had estimated that the Fantom exploit resulted in losing assets worth $6.7 million.
From their finding, the Spreek investigators noted the stolen assets constituted customers’ assets and funds from external sources. In support of the Spreek findings, the CertiK team noted that Fantom attackers heisted assets worth approximately $7 million.
The CertiK team shared a screenshot of the Etherscan report demonstrating suspicious funds transfer. The Etherscan report illustrated the movement of funds from an account titled “Fantom Foundation Wallet 1” to external wallets labeled “Fake_Phishing188024.”
According to Etherscan, the attackers transferred CVX, DAI, and USDC tokens worth 2000,1000 and 4500, respectively. In a subsequent transaction, over 1 million FTM were transferred from an address labeled “Fantom Foundation Wallet 20” to a wallet named “Fake_Phishing32.”
On Telegram, one affected user confirmed losing assets worth $3.4 million to the attackers. Commenting on this, the Fantom telegram administrator argued that the hackers managed to drain funds stored in the hot wallet. The administrator added that the exploit had minimal impact on the cold wallet.
FTM Establishes a Bearish Momentum
From the coordinated investigation, the probing team suspected that one of Fantom’s employees had sent funds to a fake wallet. They alleged that the scammers traced the transaction and compromised the private keys.
Even though the Fantom team has not provided further details concerning the attack, it seems the hacker had launched multiple attempts to compromise wallets.
In July, the hackers compromised the Fantom multi-chain bridge, that resulted to loss of assets worth around $126 million. The Fantom team noted that the hackers identified a vulnerable bridge code to launch an exploit.
News concerning the Fantom attack flipped its native token FTM market structure bearishly. According to CoinMarketCap, the FTM fell by 3.63% to trade at $0.177 in the last 24 hours.
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