Horrified owners of cryptocurrency Solana have been coming to the realisation that their accounts have been hacked and millions of dollars stolen. About $6m is so far reported missing from ‘hot wallets’, which are based online, and the security breach is even more concerning as the breach of protocols is so far unexplained.
Fraudulent Attacks Hold Back the Solana Price
Holders of Solana who weren’t directly caught up in the scam are not immune from the fallout. Between 2nd and 9th August, the altcoin sector as a whole outperformed the big two coins, Bitcoin and Ethereum. However, the revelation that hackers had infiltrated the platform meant that the price of Solana missed out on that boom. Insurgent coins with innovative new technological advantages still have to perform the basic duty of keeping investors’ money safe.
In little over a week, the price of Ethereum surged by more than 13%, while Solana flatlined and posted a gain of only 0.83%.
Ethereum Price Chart – 2nd-9th August 2022 – Up 13%
Solana Price Chart – 2nd-9th August 2022 – Up 0.83%
The attack on Solana couldn’t come at a worse time. In the last 12 months, Solana has moved into the table of the top-10 altcoins ranked by market capitalisation, and it has even been tipped as one of the best Bitcoin alternatives.
Move to Cold Wallets Now
The fraudulent activity is reported as being limited to Solana investors who hold their coins in online accounts. The details are still unclear, with a lack of communication and transparency resulting in curious minds offering various ways that the hack could have been committed.
Some have claimed that the source of the vulnerability stems from Phantom, the non-custodial crypto wallet that can be used to manage assets on the Solana blockchain. Problems of this scale with a wallet that operates at the core of the Solana blockchain would be most concerning.
Phantom stated: “At this time, the team does not believe this is a Phantom-specific issue.” However, until the nature of the hack is fully understood, there is an understandable widespread loss of confidence.
For now, the urgent and sensible cry is to move to cold wallets. This instruction comes from the Solana platform itself as well as tech-savvy crypto investors. Users who are without a hardware wallet or who are unwilling to run the risk of having a very valuable hard drive stolen or lost are sending funds to a centralised custodial exchange as a temporary workaround.
The long-term impact of the fraudulent activity on the price of SOL is yet to be confirmed, but the short-term prognosis isn’t good.
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