Lack of Action by Algorand Over Wallet Hack

Lack of Action by Algorand Over Wallet Hack

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An editor at Coincrop

08 Mar 2023 | 4 min read


achXBT slammed Algorand's neglect to accept the persistent wallet drain hack, urging users to switch to more dependable wallets. In response, the Algorand Foundation declared their resolution and highlighted available options for a safer experience.

The "on-chain sleuth" revealed that those using Algrorand had suffered millions of dollars in losses due to the attack, yet the project has been noticeably slow in providing assistance to those affected.

On February 27th, MyAlgo issued an urgent alert to all users: withdraw funds stored in Mnemonic wallets right away. In a recent post, the organization acknowledged multiple hacks and stated that the underlying cause of such attacks remains unknown.

Investigating the issue, ZachXBT deduced that cybercriminals had illicitly obtained approximately $9.2 million worth of digital assets - mainly 19.5 million ALGO and 3.5 million USDC - between February 19th–21st.

After more than seven days since MyAlgo's initial warning, ZachXBT harshly criticized Algorand for their failure to close off the malicious actor’s pathways. He denounced this disregard from the community as completely unacceptable.

On March 6, the Algorand Foundation released a factual statement about their findings which reported that there were no vulnerabilities found in either the protocol or software development kit, “The Algorand protocol is robust and secure, and has not been compromised. “

Moreover, the foundation has communicated with MyAlgo and validated that no security flaws were found. Yet investigations are still in progress.

The Algorand Foundation made it clear that MyAlgo is a third party not affiliated with them or their protocol. They want to emphasize that there are no direct connections between the two entities.

To ensure users' funds are secure, the foundation is strongly advising that they withdraw their MyAlgo holdings and move them to either a different wallet provider or an alternative hardware wallet such as PeraAlgo or Defly.

In a video about wallet security, Algorand's CTO John Woods highlighted the technical components of crypto wallets and inspired viewers to secure their funds in hardware wallets for optimal safety. He clarified that this kind of wallet offers far better safeguards than other types.

“the key never leaves the hardware wallet; the hardware wallet doesn’t have the physical capability to give the key out via the USB interface.”

Woods highlighted that Algorand is deeply concerned by the effect of fraud and theft on its users, urging patience while MyAlgo completes a detailed investigation.



An editor at Coincrop
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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.

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