Bittensor Suffers $8 Million Exploit, Halts Blockchain Transactions

By: Eva Baxter

Decentralized AI network Bittensor faced a major security breach recently when an exploit on its users' wallets led to the loss of $8 million worth of assets. Blockchain investigator ZachXBT reported that a specific Bittensor user was drained of 32,000 TAO, valued at around $8 million, due to a leaked private key. This news quickly affected the price of TAO, which plummeted by approximately 15% to a six-month low of $227 before slightly rebounding to $240.

Chain Pause

In response to the incident, Bittensor confirmed the situation and announced on X that the network would be in 'safe mode' for 24 hours as they investigate the attack on multiple Bittensor wallets. During this period, the network can only produce blocks, and no transactions will be processed. The project's official statement added that the team would prioritize resolving this issue over releasing any regular software updates for either mainnet or testnet until the chain is fully operational again.

Ala Shaabana, Bittensor's co-founder, echoed this sentiment in a separate social media update, indicating that the attack had been contained and the chain placed in safe mode. He mentioned that the team is still investigating and considering all possibilities.

Community Reactions

Bittensor validators like RoundTable 21 confirmed that the incident did not affect them as their delegators' funds remained safe. However, some in the crypto community voiced concerns about the implications of halting the blockchain. One user noted that while pausing the chain might be a necessary action under specific circumstances, it could harm the network's reputation as a ‘decentralized AI’ protocol. If developers can halt the chain, it's conceivable that other entities, such as governments, could also exert control.