MyAlgo Advises Users to Withdraw Funds After $9.2M Hack
Algorand wallet provider MyAlgo has advised its users to withdraw funds after suffering a $9.2 million exploit.
MyAlgo is yet to determine the cause of the hack, and Algorand has denied the problem being from their end.
Mnemonic wallets are more susceptible to the hack, but the crypto exchange ChangeNOW has frozen $1.5 million.
MyAlgo, a wallet provider for Algorand (ALGO), after falling victim to a $9.2 million hack, has advised users to withdraw their funds from their Mnemonic Wallets as they continue to investigate the cause of the hack.
John Woods, CTO of Algorand Foundation, has revealed that the impacted 25 accounts holding ALGO. However, Woods confirmed that the exploit was not because of a flow in Algorand’s Software Development Kit (SDK).
MyAlgo referred to the hack as a targeted attack on high-profile Algorand wallets. The users affected by the attack had significant funds lying in their accounts, and their keys were stored in a browser.
The wallet provider says no other movements have taken place since the attack. On-chain sleuth ZachXBT confirmed the attack, stating that crypto exchange ChangeNOW has frozen $1.5 million worth of crypto linked to the attack.
I haven’t seen many posts about this on CT yet but it’s suspected over $9.2m (19.5M ALGO, 3.5m USDC, etc) has been stolen on Algorand as a result of this attack from Feb 19th to 21st.
ChangeNow shared they were able to freeze $1.5m. https://t.co/BPCXTUD57n pic.twitter.com/A3t7Ss0e83
— ZachXBT (@zachxbt) February 28, 2023
MyAlgo Advises Users to Withdraw Funds
MyAlgo tweeted on Monday that despite investigations, it still doesn’t know the root cause of the exploit. While investigating the exploit, MyAlgo has advised users to take precautionary measures to protect their assets.
IMPORTANT: We strongly advise all users to withdraw any funds from Mnemonic wallets that were stored in MyAlgo. As we still don’t know the root cause of recent hacks, we encourage everyone to take precautionary measures to protect their assets. Thank you for your understanding.
— MyAlgo (@myalgo_) February 27, 2023
According to MyAlgo, wallets created with a seed phrase are the ones to watch out for. Users in this category using mnemonic wallets have been advised to switch to a ledger wallet or open a new account.
Users with Mnemonic wallets are more susceptible to the exploit. A Mmnemonic wallet typically generates a private key between 12 and 24 words.
Algorand Struggles with FUD Post-Hack
Although Woods has clarified that the exploit “is not the result of an underlying issue with the Algorand protocol” or its SDK, there has been a rise in fear, uncertainty, and doubt (FUD) in the Algorand community.
While the MyAlgo team has called for calm and for users to take their time to avoid transferring their funds to the wrong wallet, the FUD has affected the price of ALGO. In the last seven days, ALGO has declined by 10.75%.
The seven-day price chart for Algorand (ALGO). Source: CoinMarketCap
On the Flipside
A report from Algorand developer collective D13.co suggests that the hack could result from compromised users’ private keys in a social engineering phishing hack or a “targeted exfiltration of unencrypted private keys.”
Why You Should Care
MyAlgo has said it will continue to work with authorities and conduct a “thorough investigation to determine the root cause of the attack.”
Read about other recent wallet exploits in:
2,000 Private Keys Stolen in Edge Wallet Security Exploit
You can also read:
Exchange Wallets VS. App Wallets: Which One Should You Go For?
Filed under: Bitcoin - @ February 28, 2023 3:10 pm