Developers of the decentralized AI project Bittensor have faced a serious security threat that forced them to halt blockchain operations. A recent attack resulted in a significant loss of funds: one user wallet lost around 8 million dollars in TAO tokens. As a result of this incident, the Bittensor network has been unable to process new blocks for over five hours, as confirmed by data on the blockchain explorer.
A member of the Bittensor team, speaking on Discord, announced that in order to ensure security, they have decided to completely stop transactions on the chain until more information about the nature of the attack is obtained. The team is actively investigating the incident and taking measures to protect the network.
On-chain analyst ZachXBT suggested that there may have been a leakage of private keys, which could have led to the theft. According to his findings, 32,000 TAO were stolen from a single address, equivalent to 8 million dollars. This highlights the scale of the attack and its potential consequences for network users.
Project co-founder Ala Shaabana confirmed that the Bittensor network is currently operating in a secure mode. Blocks are still being generated, but transactions are suspended. Bittensor is known as a decentralized marketplace for algorithms in AI and machine learning fields. The governance token TAO has a limited supply of 21 million coins, similar to Bitcoin.
In light of this incident, the price of the TAO token has significantly dropped: from around 265 dollars to now 225 dollars, representing a 15% decline. After a slight recovery, the current price of TAO is hovering around 238 dollars.
According to CoinGecko, the TAO token ranks sixth in market capitalization among AI tokens, with a value of around 1.66 billion dollars.
It is worth noting that during the second quarter of this year, the crypto industry suffered significant losses due to hacking attacks and fraud. According to Immunefi, the damage from 72 incidents amounted to approximately 572.7 million dollars. This underscores the growing security threats in the crypto space and the need for enhanced protection measures.
