Bittensor, a prominent blockchain network, has suspended its operations following a significant security breach that led to the theft of at least $8 million in digital assets. The shutdown, intended to mitigate the exploit's impact, was confirmed by co-founder Ala Shaabana in a July 3 announcement on X. Shaabana stated that the attack has been contained and the network is in safe mode, with blocks being produced but no transactions permitted, as investigations continue.

The breach underscores the ongoing threat of hacks in the cryptocurrency space, which hampers mass adoption. Over the past 13 years, the crypto industry has lost nearly $19 billion to 785 reported hacks. The latest theft was first uncovered by on-chain investigator ZachXBT, who indicated in a July 3 Telegram message that the Bittensor network was compromised due to a potential private key leak. The attacker exploited an unknown address, labeled “5FbW,” to steal 32,000 Bittensor (TAO) tokens, worth approximately $8 million.

This incident follows a previous attack on June 1, where another wallet was drained of $11.2 million worth of TAO tokens, according to ZachXBT. Historically, smart contract vulnerabilities have been the primary method for hackers. However, private key leaks have now become more prevalent. According to the "2024 Crypto HackHub Report" by Merkle Science, over 55% of hacked digital assets in 2023 were lost due to private key leaks. This shift is attributed to hackers targeting easier victims, such as those with poor security practices.

Mriganka Pattnaik, co-founder and CEO of Merkle Science, explained in an interview with Cointelegraph that while smart contract vulnerabilities remain a concern, hackers are increasingly targeting areas outside smart contracts, like private key leaks. These leaks, often due to phishing attacks or insecure storage practices, have led to significant losses. In contrast, funds lost to smart contract vulnerabilities plummeted by 92% in 2023, dropping from $2.6 billion in 2022 to $179 million.

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