The cryptocurrency space is always vulnerable to a major security breach, and very recently a strike on Bittensor, a decentralized artificial intelligence project, served to hammer this point home.
This incident serves as a stern reminder to users to be vigilant and adopt all measures to secure their digital assets.
As London is the UK city with the most businesses that accept bitcoin, it is vitally important for the capital’s future that cryptocurrency security is treated as a serious priority.
Bittensor Network Down After $8 Million Hack
On July 3, 2024, Bittensor, a decentralized network that connects machine-learning models from people across the world, was hit by a security attack, forcing it to shut down.
The attack saw more than $8m in TAO, Bittensor’s native token, stolen.
Co-founder Ala Shaabana wrote on his X account later that day that the network had been put into “safe mode” to avoid further losses.
The attack was identified by a well-known on-chain investigator, ZachXBT.
An unknown address was exploited to obtain TAO tokens worth $8m.
This incident happened just a month after another wallet was drained for $11.2m.
Crypto Security Landscape: A Cause for Concern
The Bittensor hack, following the one in June, raises a red flag regarding cryptocurrency and decentralized applications (dApps) security.
According to blockchain security firm PeckShield, more than 20 hacking incidents took place within the crypto space in June 2024, with losses pegged at an estimated $176.2m.
While this represents a decrease from the $385m stolen in May 2024, it demonstrates the relentlessness of cyber threats.
Breaking down the major hacks of June 2024 paints a worrying picture:
- A CeFi platform, Btctruk, lost a stunning $100.25m.
- Another CeFi, Lykke, lost $22m.
- UwULend, a DeFi protocol, was drained of $19.4m.
- Another DeFi project called Holograph lost $14.4m.
- DeFi protocol, Velocore, fell victim to an attack involving $6.8m.
The incidents show the vulnerability of CeFi and DeFi platforms, requiring robust security measures across the whole crypto ecosystem.
While CeFi and DeFi platforms have classically been the battleground of cyberattacks, sites like CryptoCasinos show that, increasing cryptocurrency adoption among online casinos opens up a new layer of vulnerability.
This in turn introduces new security challenges like integration vulnerabilities and other emerging threats that are associated with this growing trend.
Staying Safe in the Crypto Jungle
Though the news may sound daunting, there are steps users can take to protect their crypto assets:
- Self-custody: Consider storing your crypto in a safe hardware wallet whereby you’re in control of the private keys and not reliant on third-party platforms.
- Research and due diligence: Do your homework on the security practices of any project and go through all audit reports before you invest in them.
- Beware of social engineering attacks: Most scams revolve around phishing and other kinds of social engineering. Never give your private keys or sensitive information to anyone.
- Strong passwords and 2FA: Use robust, unique passwords for all crypto accounts and turn on two-factor authentication for maximum safety.
- Stay Informed: Keep updated on all the latest vulnerabilities in security and best practices within the crypto space.
Keep in mind, that these general steps can go a long way in developing an improved crypto security posture of users and reduce the potential risks of them becoming victims of cyber-attacks.
The Expanding Threat Landscape: Beyond Bittensor
The Bittensor hack was undeniably massive but is just a drop in the stream of cyber threats that target interests within the crypto space.
Let’s dig just a bit deeper into some things we ought to be concerned about as this threat grows:
- The Sophistication of Attackers: In some cases, hackers constantly advance their methods of operation and use sophisticated social engineering techniques, zero-day exploits, and advanced malware to penetrate vulnerable systems. Such attacks may prove to be very well-targeted and extremely hard to detect, thus much more perilous.
- DeFi: A double-edged sword, DeFi comes with several advantages, although one of its cons is that, without any central body oversight, it presents vulnerabilities to exploit. Smart contract bugs and unaudited protocols are like a honeypot for attackers.
- Insider threats: Not all threats originate from the outside of a project or exchange. Malicious insiders can use their access to manipulate systems and steal funds, underlining the importance of background checks and solid internal controls.
- Supply Chain Attacks: Cybercriminals can easily target third-party vendors or service providers associated with crypto projects. A vulnerability in these could give an attacker access to sensitive user information or manipulate the systems being used for storing or transferring crypto assets.
The Future of Crypto Security: Building a More Secure Ecosystem
The crypto industry’s focus is all about the next level of security.
Here are some promising initiatives:
- Security Audits and Bug Bounties: Regular security audits by well-known firms can help identify possible attacks before they are executed. Bug bounty programs incentivize white-hat hackers to discover and responsibly report security flaws.
- Smart Contract Security Enhancements: Major importance is attached to the development of self-custody wallets with high-security features and the continuous improvement of smart contract languages concerning security, besides making them safer and less error-prone.
- Stakeholder Collaboration: Exchanges, DeFi protocols, security firms, and regulatory bodies should collaborate on information sharing and response coordination for new threats and contribute to the development of industry-wide security standards.
- User Education: Users shall be empowered by knowledge about common security threats and best practices. Educational initiatives promoting responsible crypto usage can vastly improve the security posture of the ecosystem.
Conclusion: A Shared Responsibility
The hack of Bittensor is a serious reminder that crypto security is still very much in the works.
If there are obligations by developers and their respective projects to ensure tight security, the user also has a critical role to play.
A user can work toward a safer crypto environment by actively taking care of digital assets, staying updated on emerging threats, and using good judgment in the choice of reputable platforms with tight security practices.
In the final analysis, developing a truly secure crypto ecosystem is incumbent on every stakeholder: developers, users, security firms, and regulatory bodies.
If creativity, collaboration, and education are kept central to this commitment, there could be a world where the crypto community makes sure that digital assets will, at all times, be safe and accessible.
Photo by Kanchanara on Unsplash
