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A $550K hot wallet hack occurred on Fantom Foundation.

In a significant setback, the Fantom Foundation experienced a loss of $550,000 in cryptocurrency due to a vulnerability found in its official Fantom wallet. Confirming the breach on X, the Foundation asserted that the majority of the pilfered funds belonged to other users, emphasizing that 99% of the Foundation’s overall funds remained secure. An ongoing investigation is underway to scrutinize the nature of the attack.

Initial reports from blockchain security researchers suggested a theft amounting to approximately $7 million in crypto. However, the Fantom Foundation released an official statement clarifying that certain wallets marked as “Fantom: Foundation wallet” were erroneously labeled by block explorers. Notably, not all the funds that were taken originated from the Foundation. The team explained that some of the initially affected wallets had been reassigned to a Fantom employee and were no longer repositories of company funds. The investigation continues to unravel the intricacies of the compromised wallets.

The Fantom Foundation, recognized as the developer behind the Fantom network, a smart contract platform compatible with the Ethereum Virtual Machine, boasts assets exceeding $45 million locked within its contracts, as reported by DefiLlama. Importantly, the attack targeted both the Foundation and other users of Fantom wallets, rather than compromising the Fantom network itself.

On Oct. 17, On-chain investigator Spreek reported an “alleged” attack on the Foundation, citing information from Telegram. Subsequently, they published a list of compromised wallets, estimating losses at $6.7 million. However, they acknowledged the possibility that drained funds might include contributions from sources outside the Fantom Foundation.

CertiK, a blockchain security platform, corroborated the Foundation’s hacking, initially estimating losses at $657,000. This figure was later revised to approximately $7 million. A closer examination of blockchain data revealed that an account labeled “Fantom Foundation Wallet 1” by Etherscan had transferred over 2,000 CVX, 1,000 Dai, $4,500 USD Coin, and other tokens to a wallet labeled “Fake_Phishing188024.” Additionally, an account identified as “Fantom Foundation Wallet 20” by the Fantom network block explorer sent over 1 million FTM at $0.18 each to an account labeled “Fake_Phishing32.” Such transactions typically indicate a compromised private key when a development team unwittingly transfers funds to a known scam account.

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