Altcoin Experiences Major Security Breach: Users’ Wallets Drained
A recent incident at an altcoin has left certain users facing losses after a security vulnerability in the platform’s wallet services was exploited.
Loopring (LRC), a zkEVM protocol operating on Ethereum that touts itself as having the “most secure wallet” in the Ethereum space, disclosed a breach in its ‘Guardian’ two-factor authentication service. This service allows users to designate trusted entities in their wallets to assist with security measures, such as locking compromised wallets or recovering lost seed phrases. However, a hacker was able to bypass Loopring’s Official Guardian service and carry out unauthorized recoveries on wallets using a single guardian.
Loopring explained that more than half of the custodial wallets require multiple protectors to initiate transactions, thus wallets utilizing multiple protectors or a third-party protector were shielded from the vulnerability. The platform identified two wallet addresses involved in the breach, with one of them managing to withdraw around $5 million worth of tokens from affected wallets.
In response, Loopring is working with security experts to investigate how the 2FA service was compromised. As a precautionary measure, the platform has temporarily suspended Guardian-related and 2FA-related operations to prevent further exploitation of the vulnerability. Loopring also stated that they are collaborating with law enforcement to pursue the attacker and urged anyone with relevant information to come forward.
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