CDS Crypto News Crypto News Today- Loopring Most Secured Wallets Breach Leads to 4-Month Low for LRC
Crypto News

Crypto News Today- Loopring Most Secured Wallets Breach Leads to 4-Month Low for LRC

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Crypto News Today- Loopring Most Secured Wallets Breach Leads to 4-Month Low for LRC

Crypto News Today- Loopring Most Secured Wallets Breach Results in 4-Month Low for LRC

Crypto News– On June 9, Loopring, an Ethereum ZK-Rollup protocol, disclosed that certain smart wallets had been exploited, although the exact amount was not revealed.

In response to this development, Loopring’s native token LRC saw a decline of around 4%, reaching a four-month low of $0.21, as per data from CryptoSlate.

$5 million in losses incurred

Blockchain security firm Cyvers Alert reported that the breach resulted in the theft of approximately 1,373 ETH, equivalent to $5 million.

Loopring had previously touted its smart wallets as the most secure wallets on the Ethereum blockchain, emphasizing their robust security measures designed to safeguard against asset theft.

However, the firm revealed that its two-factor authentication (2FA) service had been compromised, enabling the malicious actor to exploit a recovery process, reset ownership, and execute asset withdrawals. Loopring explained:

The attack succeeded by compromising Loopring’s Two-Factor Authentication (2FA) service, allowing the hacker to impersonate the wallet owner and gain approval for the Recovery from the Official Guardian. Subsequently, the attacker transferred assets out of the affected wallets.

In response, Loopring initiated collaboration with blockchain security firm SlowMist to ascertain the vulnerability in its 2FA service. The team temporarily suspended Guardian and other 2FA-related operations, emphasizing:

Loopring is working with law enforcement and professional security teams to track down the perpetrator. We will continue to provide updates as soon as the investigation progresses.

Intelligent Wallets

This breach comes at a time when intelligent wallets are gaining popularity within the Ethereum community.

In the past year, there has been a significant uptick in support for intelligent wallets, particularly after the Ethereum Foundation’s ERC-4337 account abstraction went live on the Ethereum mainnet. This advancement in technology allows users to personalize their digital asset management.

Key figures such as Vitalik Buterin and entities like Coinbase have thrown their support behind this technology, which is anticipated to be incorporated into the upcoming Pectra hard fork.

However, decentralization advocate Chris Blec has pointed out that the Loopring incident highlights that intelligent wallets are not yet fully mature, advising users to “rely on properly secured seed phrases for maximum safety and control over their assets.

FAQs

How did the breach impact the price of LRC?

Following the breach, the price of LRC dropped to its lowest level in four months due to concerns over the security of Loopring’s smart wallets.

Why is there increased scrutiny on technologies related to smart wallets following this breach?

The breach of Loopring’s smart wallets has raised concerns about the security and reliability of such technologies. As a result, there is increased scrutiny on similar technologies to ensure the safety of users’ assets.

For the latest in crypto updates, keep tabs on Crypto Data Space.

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