Bittensor suffers $8 million exploit, TAO price tumbles to six-month low Bittensor suffers $8 million exploit, TAO price tumbles to six-month low
Bittensor's developers said they paused the chain to investigate the attack.
2 min read
Updated: Jul. 3, 2024 at 10:45 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Decentralized AI network Bittensor paused blockchain transactions after its users’ wallets suffered an exploit that caused the loss of $8 million worth of assets.
Earlier today, blockchain investigator ZachXBT told his Telegram Channel members that a Bittensor user was drained of 32,000 TAO, worth $8 million, because of a leaked private key. He wrote:
“Bittensor was halted due to additional thefts earlier today potentially as a result of private key leakage.”
News of the exploit immediately impacted TAO’s price, which fell by around 15% to a six-month low of $227. However, according to CryptoSlate’s data, it has slightly rebounded to $240 as of press time.
Chain pause
Following the attack, the Bittensor team confirmed the incident and wrote on X that the chain would be in “safe mode” for the next 24 hours due to its investigations into the “attack on a number of Bittensor wallets.” During this period, the network would only be able to produce blocks, and no transactions would be processed.
The project added:
“As we are prioritizing this issue for the rest of this week, we will not be releasing any regular software update for either Bittensor software or for any chain on either mainnet or testnet until we have brought the chain fully back online.”
The blockchain network’s co-founder Ala Shaabana also corroborated this in a separate social media post, stating:
“By way of an update, we have contained the attack and put the chain into safe mode (blocks producing but no transactions are permitted). Weโre still mid investigation and are considering all possibilities. Stay tuned.”
Bittensor’s Block Explorer data shows that its last block and transaction were confirmed about ten hours ago.
Notably, Bittensor validators like RoundTable 21 revealed that the incident did not impact them as their delegator’s funds remain safe.
Meanwhile, a crypto enthusiast noted that the blockchain developers’ decision to halt the chain might damage the reputation of the network’s “decentralized” claim. The X user wrote:
“It might be a pro that the chain that can be halted is instances like this, but I think the reputation damage for a ‘decentralized AI’ protocol is more relevant. After all, if devs can switch off the chain, the government can do so too.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bittensor is an open-source protocol that powers a decentralized, blockchain-based machine learning network.
ZachXBT is an independent on-chain sleuth who is popular on revealing bad actors in the crypto space.