Bittensor Blockchain Disrupted After Attack on Multiple User Wallets Steals $8M Worth of TAO Tokens

The Bittensor blockchain was disrupted early Wednesday after an attack on multiple user wallets stole at least $8 million worth of the project's TAO tokens.

Multiple user wallets were targeted in an attack on the Bittensor blockchain early Wednesday, resulting in the theft of at least $8 million worth of the project's TAO tokens.

The breach was noticed by pseudonymous on-chain investigator ZachXBT, who noted in a Telegram message that Bittensor was halted due to additional thefts earlier in the day, possibly caused by a private key leakage.

The address ‘5FbW’ was exploited, leading to the theft of 32,000 TAO tokens, valued at around $8 million. This incident follows a similar attack a month earlier, where a different wallet was drained of $11.2 million in TAO tokens.

After an initial report of the attack by pseudonymous on-chain investigator ZachXBT, the Bittensor core team confirmed the incident in a message on the project's Discord channel.

“We are investigating, and in an abundance of caution, have recently fully halted transactions on-chain until more information is available about the nature of this attack,” a core team member stated in the Discord message.

However, the team assured users that all funds were safe following the network halt. After the announcement of the attack, the value of TAO tokens dropped by approximately 15%, trading at $235 at press time. However, there was a slight recovery after the core team communicated that measures were being taken to mitigate additional risks.

The investigation into the attack suggests that a private key leak facilitated the theft. Ala Shaabana, the co-founder of Bittensor, announced on X, “By way of an update, we have contained the attack and put the chain in safe mode (blocks producing, but no transactions are permitted). We're still mid-investigation and are considering all possibilities.”

In response to the breach, Bittensor's team has taken steps to secure the network and resume normal operations. The blockchain has been put into “safe mode,” where blocks are still being produced, but no transactions are being processed. This measure aims to prevent any further unauthorized transactions while the investigation is ongoing.