Genius (GNUS) Blockchain Network Loses $1.27M in Token-Minting Exploit; Plans $1M Compensation
Summary:
The artificial intelligence blockchain network, Genius (GNUS), suffered a $1.27 million loss due to a token-minting exploit on May 5. The team is launching a new token to replace the old one and users are advised against buying the older version. GNUS's CEO, known as "SuperGenius", revealed plans to compensate victims $1 million, covering approximately 80% of the losses. This incident underscores persistent exploit risks to blockchain networks, even as security enhancements gradually reduce these attacks.
On May 5th, the artificial intelligence blockchain network Genius (GNUS) saw a $1.27 million loss due to a token-minting attack. Following this incident, the GNUS team communicated their intention to unveil a fresh version of the token urging users to discontinue purchases of the older one. GNUS offers a platform where users can execute AI computations and earn tokens in return.
As per the information from CertiK, a blockchain security firm, on May 6, an attacker illicitly obtained the private key to the GNUS team account that starts with 0x18 leading to this ordeal. The perpetrator managed to replicate the “salt” data of the token from Ethereum, this enabled them to fabricate a Fantom network version of the token via the Axelar bridge protocol. Following these actions, the fraudulent creation and distribution into the market of a hundred million fake GNUS tokens took place. The aftermath was a massive price plummet which essentially shifted the wealth from pre-existing token holders to the attacker, who obtained legitimate assets against the artificially created ones.
The company's CEO, known as “SuperGenius”, disclosed in a May 5 post on social media site X that the 0x18 account breach occurred when an assailant accessed the team’s private Discord conversations, going on record to say “Apparently hackers can observe private messages on Discord”. SuperGenius declared an immediate solution, stating the team will contribute $500,000 in Ether (ETH) from their own resources into a liquidity pool for the new token once released. In addition, the team plans to deposit another $500,000 currently locked in fees due to them but not accessible until February 2025. This results in an aggregate amount of $1 million as recompense for the victims.
The loss resulting from the attack has been calculated by CertiK to be approximately $1.25 million. This suggests that the designated compensation fund would cover a considerable 80% of the resultant losses.
Notwithstanding the development of better security protocols, blockchain platforms continue to face threats of exploitation. However, according to an April 30th report from CertiK, Crypto users in April experienced the lowest levels of exploit-induced losses since the year 2021, indicating a promising decline in these security breaches.
Published At
5/6/2024 9:39:17 PM
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