Solana wallet ‘eaten’ in blow to crypto network

Thousands of crypto accounts linked to the Solana blockchain have been “drained” into one of the largest networks in the digital asset market in one fell swoop.

Solana and several other platforms linked to the blockchain on Wednesday investigated an apparent hack that affected at least 7,767 digital wallets, the computer programs that store traders’ crypto tokens.

The Solana Foundation, a nonprofit organization focused on the growth and security of the Solana network, told the Financial Times that it “doesn’t appear” that the operation had compromised core infrastructure, but rather was caused by a bug “in used software popular among Solana users by various wallets”.

The apparent hack marks another setback for Solana, who has been touted as one of the crypto industry’s potential long-term winners because it’s built to handle thousands of transactions per second, but has suffered a series of outages in recent months.

The Solana Foundation said on Wednesday that “engineers from multiple ecosystems, with the help of several security firms, are investigating depleted wallets on Solana.” In many recent episodes of crypto hacking, users did not receive their money back because transactions cannot usually be reversed on blockchains.

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Phantom, a wallet app built on Solana, and Solana non-fungible token marketplace Magic Eden were among the providers who said they were affected by the apparent hacking incident.

The Solana Foundation said wallets that allow traders to keep their coins offline rather than using online applications do not appear to be affected.

Solana Labs, a developer of the Solana blockchain, is backed by major groups in traditional and cryptocurrency markets, including venture capital firm Andreessen Horowitz, fast trading retailer Jump Trading, and Sam Bankman-Fried’s Alameda Research.

Solana is designed to process up to 50,000 transactions per second, a scale much larger than rivals including bitcoin and ethereum, and comparable to established traditional financial services such as the Nasdaq exchange. In January, analysts at Bank of America said Solana could “become the visa of the digital asset ecosystem”.

However, Solana has faced processing issues that have tarnished its reputation. In June, the entire Solana network went down for four hours, a failure documented on the network’s official status website.

The blockchain’s eponymous native currency is down nearly 80 percent this year, outpacing the declines sustained by its bigger rivals bitcoin and ether.

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