Hassan Maishera
TL;DR
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Loopring has suffered a security breach, losing $5 million in the process.
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LRC is down by more than 3% in the last 24 hours.
Loopring Loses $5M in a Security Breach
Loopring, the zkEVM protocol built on Ethereum, announced on Sunday that it had suffered a security breach.
In its announcement, Loopring said the attack was a security breach related to its 'Guardian' two-factor authentication service.
🚨Incident Alert: Loopring Smart Wallets Compromised🚨
— Loopring💙 (@loopringorg) June 9, 2024
A few hours ago, some Loopring Smart Wallets were targeted in a security breach. The attack exploited wallets with only one Guardian, specifically the Loopring Official Guardian. The hacker initiated a Recovery process,… pic.twitter.com/Y9mYC4j9QJ
Loopring’s Guardian service allows users to vote to name wallets of trusted individuals or institutions to assist in security operations such as locking a compromised wallet or restoring one if the seed phrase is lost.
However, the attacker succeeded in compromising Loopring's 2FA service, allowing them 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.
The team assured users that since more than half of guardians are needed to instigate transactions, wallets with multiple guardians or a different, third-party guardian were protected from the exploit.
Loopring also revealed that two wallet addresses were involved in the security breach. According to blockchain data, one wallet stole around $5 million worth of tokens from the affected wallets. The Loopring tea added that,
"We are actively collaborating with Mist security experts to determine how our 2FA service was compromised. To protect our users, we have temporarily suspended Guardian-related and 2FA-related operations. Following this action, the compromise has ceased."
Loopring added that it is working with law enforcement to trace the hackers, urging those with additional information about the security breach to share it with them.
LRC, the native coin of the Loopring ecosystem, is down by more than 3% in the last 24 hours, with traders barely reacting to the news. At press time, LRC is trading at $0.2208, down by 17% in the last 24 hours.
