The cool side of the blazing crypto ecosystem.
A Web 3.0 newsletter covering the latest news that matters.

What’s in today’s crime cooler:

• Summary of What Happened

• What is the Impact on Users, Businesses, and Funds

• How to be More Secure in the Future

• Final Thoughts

On July 7, Multichain suffered a hack that resulted in the loss of over $126 million worth of various tokens.

The attacker managed to gain illegal access to Multichain's Multi-Party Computation (MPC) address, which stores funds locked between blockchains.

The hacker then withdrew funds from this address and transferred them to an externally controlled wallet. The Fantom Bridge was significantly affected by this outflow, with the hacker withdrawing various tokens, including wBTC, USDC, and USDT, along with several other altcoins. Funds were also stripped from the Moonriver Bridge, with at least $6.8 million worth of various coins, including USDC, being moved to an external address. An address associated with Multichain connecting with Dogecoin also reportedly lost over $600,000.

In response to the security breach, Circle intervened by freezing $63 million from the Multichain hack. This amount was frozen across three transactions, effectively hindering the hacker's cash-out efforts. The frozen USDC cannot be moved, providing some relief to the community. However, it remains unclear whether Circle will reverse funds to Multichain.

Following the hack, Multichain advised all users to stop using its services and revoke any contract approvals associated with the platform. The team is currently investigating the incident and has suspended all bridge transactions on their respective chains. This incident adds to Multichain's recent troubles, including delayed transactions, multiple issues, and the disappearance of the founder.

Despite the attack, Bitcoin prices remain firm, staying above the $30,000 psychological support level. However, FTM, the native currency of Fantom, is experiencing a significant drop, with a 20% decrease from July highs.

Users:

The immediate impact on users was the loss of funds. Those who had their assets on the Multichain platform saw their tokens transferred to an unknown address. Following the breach, Multichain advised all users to stop using its services and revoke any contract approvals associated with the platform. This incident likely caused significant concern and inconvenience for users, who had to halt their transactions and take additional steps to secure their assets.

Businesses:

For Multichain, the hack has likely damaged its reputation. Trust is a crucial factor in the crypto industry, and such a security breach can lead to a loss of user confidence. The company had to suspend all bridge transactions on their respective chains, which would have disrupted their operations and could lead to a loss of business.

For Circle, the issuer of USDC, the incident required them to intervene and freeze $63 million worth of USDC associated with the hack. This action demonstrated Circle's commitment to security and its ability to respond quickly to such incidents. However, it also highlighted the risks associated with digital assets and the need for robust security measures.

Funds:

The hack resulted in the loss of over $126 million worth of digital assets. This is a significant amount and highlights the potential financial risks associated with crypto platforms. The frozen $63 million by Circle also represents a substantial sum that is currently in limbo. The incident could potentially lead to tighter regulations and increased scrutiny of the crypto industry, which could impact the market dynamics and the value of digital assets.

Moreover, the hack had a direct impact on the value of certain cryptocurrencies. For instance, FTM, the native currency of Fantom, experienced a significant drop, with a 20% decrease from July highs.

Although we do not know the full reason to how the hacker got access to Multichain's Multi-Party Computation (MPC) address. We can assume and protect ourselves in the future by these measures.

• Regular Security Audits - Regularly conduct security audits of the platform's codebase to identify and fix potential vulnerabilities. This should be done by independent third-party auditors who specialize in blockchain security.

• Secure Key Management - Implement secure key management practices. Private keys should be securely stored and never shared. Consider using hardware wallets or multi-signature wallets for added security.

• An Incident Response Plan - Have a robust incident response plan in place. This should outline the steps to be taken in the event of a security breach, including communication plans, recovery actions, and post-incident analysis.

• Insurance - While it's crucial to prevent breaches, it's also important to have a plan in case they occur. Some platforms secure insurance to cover potential losses from hacks.

Our Finals Thoughts on this hack; since we do not know the full backstory to how the hacker was able to access the addresses we can’t say what truly went wrong. Lots of money was lost, BUT USDC did save a good portion of it. On that note, hopefully the victims get reimbursed and Multichain can come clean and figure out what happened.

Share the Crypto Cooler

We can hardly contain our excitement as we grow we want to gear up and unveil a brand-new referral program. We want to hook you up with some cool rewards, including stickers, nifty dad hats, and more.
Stay tuned to be rewarded!

Disclaimer: The information shared in this newsletter is for informational purposes only and should not be considered financial advice. It is crucial to conduct independent research and consult with a financial advisor before making any investment decisions.