DeSci token creator Pump Science reported earlier today on November 27th that it had faced a private key leak for one of its wallets. The hacker who stole the key has generated fraudulent tokens via the wallet.
Pump Science, which had launched two of the most popular DeSci tokens URO and RIF, has said that the hacker could generate more scam tokens.
The news has not landed well with investors as the price of both URO and RIF are down at the press time. URO is down nearly 25% while RIF is trading 2% low, as compared to the same time last day.
Pump Science Explains The Wallet Key Leak
According to the Pump Science platform, the attack occurred via its GitHub site, where the hacker discovered a pair of keys in the source code. The same team has previously shown a similar exploit through a compromised website, raising suspicions of a planned incident close to peak token valuations.
According to the most recent explanation for the exploit, Pump Science thought the compromised wallet was only used for testing and had no real significance. Despite knowing that the key pair was present in the code, the team assumed that the URO and RIF development teams would generate tokens using a different wallet.
However, market participants are now noticing that the hack has happened very close to the URO and RIF token price peak. Both these tokens had surged tremendously in the past.
Crypto Markets Witness Rise in Wallet Hacks
The Pump Science case comes at a time when the entire crypto market is facing a rise in wallet hacks. Just previously, one of the leading blockchain security auditing firms, CertiK, had verified a serious security breach that had affected the DEXX platform on the Solana blockchain network.
After conducting an investigation, the security firm concluded that the DEXX platform’s poor private key management was the main reason for the breach, which led to the compromise of official private keys.
There have been significant financial losses as a result of this security compromise; hundreds of millions of yuan have purportedly been taken.
Why Are Crypto Wallets More Prone To Hacks?
The growth in the global crypto diaspora has made many vulnerable to wallet hacks. To understand what types of wallets are prone to hacking, one needs to consider the various mechanisms they use to function.
There are two sorts of wallets: cold and hot. Hot wallets are susceptible to crypto exchange hacking since they are constantly online.
Cybercriminals could hack into a cryptocurrency wallet and take whatever money is inside by taking advantage of network flaws.
Due to this trend, with amounts of a notable single attack that caused losses exceeding $55 million, cryptocurrency phishing attacks increased by almost 215% in August.