Bittensor TAO price falls following users’ wallet drain attack

Bittensor TAO price experienced a sharp drop after Bittensor user wallets were targeted in a significant security breach.

Following the attack, Bittensor blockchain was temporarily halted to contain the exploit, and investigations are ongoing.

Bittensor attack: what we know so far

Early Wednesday, the Bittensor blockchain was temporarily halted after team members detected an attack on several user wallets.

According to independent security researcher ZachXBT, one user lost 32,000 TAO tokens, worth $8 million, underscoring the scale of the attack.

The attack is suspected to have been caused by a private key leakage, which led to unauthorized access to user funds.

To prevent further damage, Bittensor was put into “safe mode,” meaning blocks are still being produced, but no transactions are being processed.

Ala Shaabana, co-founder of Bittensor, confirmed the blockchain’s status on X, assuring users that steps were being taken to mitigate further mishaps.

The Bittensor team is actively investigating the breach, considering all possibilities to pinpoint the exact cause and extent of the attack. This cautious approach is essential to restore user trust and ensure the security of the blockchain.

Impact on TAO price

The immediate aftermath of the attack saw TAO price drop by as much as 15%, reflecting the market’s reaction to the security breach.

Despite this sharp decline, Bittensor price have shown a slight recovery as core members assured the community of ongoing mitigation efforts. At press time, TAO was trading at $236.94, reflecting a 12.67% decline over the past 24 hours.

The market cap of the AI token has also taken a hit, dropping by about 12% to $1,662,225,276.

The 24-hour trading volume for TAO, however, surged by a whopping 125.76% to $88,788,972, indicating heightened activity as investors reacted to the news.

This surge in trading volume is likely a result of holders rushing to move their tokens to avoid loosing their investments.

At press time, the volume-to-market cap ratio was 5.31%, reflecting the liquidity and trading dynamics in the wake of the attack.

However, although today’s sudden decline caught traders by surprise, the AI token has been on a bearish trend since March 8, 2024, wiping out all the gains it had made after Nvidia’s GTC conference.

The broader impact on Bittensor’s reputation and long-term stability will depend on the effectiveness of their response and the measures they implement to prevent future breaches.

For now, the blockchain remains in “safe mode,” with the team focused on resolving the issue and enhancing security protocols.