- Hacking incidents in the crypto world are far from over.
- Recently, the Holograph attacker minted 1 billion HLG tokens.
- The tokens were initially valued at $14.4 million at the time of minting but quickly saw a substantial drop of 80% in their value.
Discover how a recent hacking incident led to the rapid devaluation of Holograph’s HLG token in just hours, shaking the crypto market.
Holograph Hacker Mints 1 Billion Tokens Promptly
Following several high-profile hacking incidents in recent days, another one has come to light involving the Blockchain tokenization platform Holograph. An unauthorized actor managed to compromise Holograph’s operator contract, which enabled them to mint an astronomical 1 billion HLG tokens, valued at $14.4 million. This unfortunate event caused the native token of the altcoin project to plummet by approximately 80% in a very brief period.
Token Value Drops Sharply
It took only ten minutes for the value of HLG to begin its steep decline. According to CoinGecko, the token fell by 79.4% within nine hours, descending from $0.014 to a local low of $0.0029. Consequently, the market capitalization of HLG dropped from nearly $22 million to $4.8 million during this period. Since the initial drop, HLG has seen a minor recovery, climbing up to $0.0075.
How Did the Hack Occur?
Per Etherscan reports, the hacker exploited a vulnerability in an initial smart contract to mint the tokens. This massive token generation was performed over nine separate transactions, the first of which occurred on June 13th at 12:47 PM UTC. Notably, the hacker executed seven of these mints in batches of 100 million tokens each. According to Matt Casto, a cryptocurrency researcher at VC firm CMT Digital, the hacker is suspected to have been a “rogue developer” who had funded Holograph’s operator contract address 26 days prior to the hack.
The Aftermath and Investigations
Holograph confirmed the hack on their Twitter account on June 14th and announced that they had mitigated the initial exploit. They are currently collaborating with cryptocurrency exchanges to freeze the affected accounts and have launched their own internal investigation while maintaining ongoing communication with law enforcement agencies. The platform also clarified its role within the Omnichain ecosystem, aimed at allowing tokens to move across blockchains while maintaining the same contract address. Several notable venture capital firms, including Animoca Brands and Mechanism Capital, have funded the altcoin project.
Conclusion
This incident underscores the ongoing security challenges faced by blockchain platforms. While Holograph has taken steps to rectify the exploit and tighten its security measures, the event serves as a stark reminder of the fragility and vulnerability that can exist within the digital currency ecosystem. Stakeholders and investors must remain vigilant as the crypto market continues to evolve, emphasizing the need for robust security protocols and timely response mechanisms.
