Blockchain Protocol Loopring Announced a $5M Security Breach
Loopring, a smart wallet application on Ethereum that advocates for privacy rights, ran into security trouble with its 'Guardian' two-factor authentication (2FA) service, the company said on Sunday.
Guardian allows users to designate trusted parties to help with tasks like locking wallets with invalid keys and recovering lost seed phrases.
Yet a hacker was able to bypass Loopring’s Official Guardian to initiate recoveries without user consent. The good news is users with 2 of 3 or 3 of 5 Multisig Wallets, where BitGo held 1 key, were not affected.
Loopring said it traced the hack to two wallet addresses, one of which siphoned off about $5 million in tokens.
The protocol has put a pause on any Guardian related operations for the meantime and it did ask security professionals to assist in digging deeper into the compromise.
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Law enforcement cooperation began tracing the offender and Loopring encourages everyone to share as much as related information.
While the event might have been unexpected for the team, Loopring’s own risk disclosure had warned of possible weaknesses in its Guardian service – recommending that users setup multiple guardians for added security.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
