Solana Down In A Green Market As Multimillion-Dollar Hack Empties Over 7,000 Wallets

Solana is currently not having the best of times. Shortly after the recent backlash and allegations the project faced from ETH proponents, especially the founder of Cyber Capital, Justin Bons; and a recently published Q2 2022 report revealing significant declines in inflows and network usage; SOL has dropped in an otherwise green market following reports of a multimillion-dollar hack targeting Solana wallets.

Over 7k Slope and Phantom wallets have been exploited in the hack

In the early hours of August 3, numerous unconfirmed reports of a hack draining wallets on Solana surfaced on Twitter. It was not until a few hours later that Solana confirmed the hack, noting that engineers from multiple ecosystems were on the ground assisting in investigations of the event.

Solana confirmed that, as of 5 AM (UTC), about 7,767 wallets had been exploited in the massive hack. The hack targeted Slope and Phantom wallets. The team encouraged users to switch to hardware wallets because “there’s no evidence hardware wallets have been impacted.”

A Solana user on Twitter reported the exploit hours before the confirmation, noting that over 500k worth of USDC had been drained. Since the hack continued, unconfirmed reports suggest that over $6M was stolen at the time of writing.

SOL is the only top crypto asset seeing a decline in 24 hours

The hack appears to have been connected to a private key compromise mechanism. The Solana team advised users who switch to hardware wallets to abandon their old wallets and create new seed phrases on their hardware wallets. Binance CEO, CZ, advised users to switch to cold wallets or centralised exchanges like Binance to safeguard their funds.

Following reports of the hack, several Solana RPC nodes went offline after being subjected to a DDoS attack to slow down the hack. The architect of the DDoS is still unknown at the time of writing, but users assume it’s the Solana community.

Amidst all this, SOL appears to be the only asset on the list of top cryptocurrencies that have significantly declined in the past 24 hours. This is unsurprising because most SOL holders are likely to sell off their assets amid growing dread spread by the hack. In the past 24 hours, SOL has dipped by 4.46% – the only crypto asset seeing a decline in the last 24 hours amongst the top 20 cryptocurrencies as of press time.