This week on Crypto Twitter: Michael Saylor leaves CEO role to “focus more on Bitcoin”, Nomad and Solana get hacked

Illustration by Mitchell Preffer for Decrypt

After two consecutive weeks of growth, crypto markets a little cramped. Even as reports of liquidity problems appear to have abated, investors remained cautious.

This week, bitcoin HODLing firms Block Inc. and MicroStrategy both reported significant depreciation of their holdings. Block is down $36 million while MicroStrategy is down a whopping $917 million. There were massive ones too Attacks on Solana and the Token Bridge project Nomad.

Reports of the Nomad exploit first appeared early Tuesday. A researcher at Crypto/Web3 investment firm Paradigm named Sam Sun (Twitter handle @samczsun) investigated the situation and tweeted a lengthy play-by-play analysis of the smart contract configuration error that cost users $190 million.

1/ Nomad just got ripped off over $150 million in one of the messiest hacks Web3 has ever seen. How exactly did this happen and what was the cause? Allow me to take you behind the scenes 👇 pic.twitter.com/Y7Q3fZ7ezm

— samczsun (@samczsun) August 1, 2022

The exploit was reportedly easy to pull off for anyone with the necessary know-how, leading to a sort of free-for-all as attackers crowded in to plunder the protocol. Nomad promptly offered a reward for anyone who returned the money and recovered on Friday 22 million dollars.

Nomad Bridge Funds Recovery Process

Dear white hat hackers and friends of ethical researchers protecting ETH/ERC-20 tokens,

Please send the funds to the following wallet address on Ethereum: 0x94A84433101A10aEda762968f6995c574D1bF154 pic.twitter.com/UF623JSZ8u

— Nomad (⤭⛓🏛) (@nomadxyz_) August 3, 2022

‘Widespread’

Barely 24 hours after the Nomad exploit, reports from a great Solana hack that may have expired up to $8 million.

🚨 Widespread Solana private key compromise 🚨

– Attacker steals both native tokens (SOL) and SPL tokens (USDC)
– Impact on wallets that have been inactive for >6 months
– Both Phantom and Slope wallets have reportedly run out pic.twitter.com/AkZXOGLD0Q

— foobar (@0xfoobar) August 3, 2022

🚨🚨🚨There seems to be a widespread SOL exploit in the game that is draining wallets across the ecosystem

Here’s what you can do now to best protect yourself
1. Go to >Settings on your @phantom wallet
2. >Trusted apps
3. >Revoke permissions on suspicious links

💜

— Magic Ethen 🪄 (@MagicEden) August 3, 2022

Binance CEO Changpeng “CZ” Zhao offered a solution: send your funds to his company.

There is an active security incident on Solana. Many (over 7000+) wallets are emptied by SOL & USDC. Cause not yet known. Maybe permissions for apps. Send the funds to a cold wallet or CEX like @Binance for withdrawal. https://t.co/nQrBXAgCbf

— CZ 🔶 Binance (@cz_binance) August 3, 2022

Justin Barlow, an investor in Solana VC firm Solana Ventures, was one of the victims.

For reference, I haven’t interacted with contracts at all in ~40 days. My ERC-20 and SPL USDC held on both @slope_finance and @TrustWallet have been emptied

— Justin.sol (@JustinBarlow) August 3, 2022

A few hours into the hack, Solana reported that nearly 7,800 wallets were victimized.

Engineers are currently working with multiple security researchers and ecosystem teams to identify the currently unknown cause of the exploit.

— Solana Status (@SolanaStatus) August 3, 2022

The team then released a partial statement claiming that the exploit was likely due to stolen private key information. Solana also said affected users appear to have been compromised through their slope wallets.

This exploit has been isolated to a wallet on Solana, and hardware wallets used by Slope remain secure.

While the exact details of this are still being investigated, private key information was inadvertently submitted to an application monitoring service. 2/3

— Solana Status (@SolanaStatus) August 3, 2022

Emin Gün Sirer, CEO and Founder of Ava Labs shared his thoughts including some highly technical explanations on how the private keys were accessed.

There is currently an ongoing attack on the Solana ecosystem. Over 7000 wallets affected, rising at 20/min. As it is very early days and the attack is still ongoing, there is a lot of misinformation and speculation. So here are a few thoughts and explanations.

— Emin Gun Sirer🔺 (@el33th4xor) August 3, 2022

Slope finally responded.

Below is our official statement on the injury situation (now published on our medium).

We feel for everyone affected and are doing our best to resolve and rectify the situation.https://t.co/E9xrKbdLOy

— Slope (@slope_finance) August 3, 2022

Twitter user and blockchain developer @fubuloubu pointed out one of the disadvantages of IP.

Solana wallet hack shows why not having open source code in crypto is irresponsible

Researchers have been working around the clock to figure out what is and isn’t the problem because the code is closed source

Hundreds of millions lost due to unnecessary IP protection

— Señor Doggo (@fubuloubu) August 3, 2022

Elsewhere

On Monday, Britain’s High Court ruled that Dr. Craig Wright, a man who claims to have invented Bitcoin, is put forward false evidence as part of his recent defamation court case against crypto podcaster Peter McCormack, who has repeatedly called Wright a liar. So McCormack was ordered to pay him £1 (US$1.21) in damages. Who says you can’t see a person smirking behind their tweet?

As some of you have now seen, the verdict in my trial against Dr. Craig Wright has now been announced.

I would like to thank my attorneys for their diligent work on the case.

I would also like to thank Mr Justice Chamberlain for this result. We are very happy with his results.

— Pedro ☠️ (@PeterMcCormack) August 1, 2022

In other news, sharp-eyed crypto reporter Jacqueline Melinek wants to know why Gucci will accept APE.

Crypto fanatic Hsaka (@HsakaTrades) pointed out Thursday that even highly successful investors like Cathie Wood make mistakes. Pretty big ones too: Looks like she sold the dip on Coinbase shares. Big time.

And no matter how you feel about crypto, there’s something odd about a Virginia pension fund investing in “yield farming”…now. Isn’t it a bit early after Terra and Celsius collapsed? Twitter financial analyst Sean Tuffy smells a bit fishy.

Arguably the biggest story of the week, MicroStrategy announced that Bitcoin-loving CEO Michael Saylor would be stepping down after 33 years on the job and taking on a new role as executive chairman. Phong Le, the company’s president, will follow in Saylor’s footsteps on Monday. Saylor will focus even more on Bitcoin.

A popular blockchain investigator believes powerful forces are planning FUD Binance.

Finally, entrepreneur Liron Shapira tweeted an intriguing thread in which he accused blockchain game Axie Infinity of being “an obvious Ponzi.”

[email protected], @Accel and @paradigm looked straight at an obvious Ponzi scheme, Axie Infinity.

They called it “play-to-earn” and invested $311 million in the parent company.

Then it collapsed.

How Web3 VCs stumbled into funding a Ponzi. 🧵

— Liron Shapira (@liron) August 3, 2022

The studio CEO behind Axie, who tokenized millions of dollars before revealing a massive hack, probably didn’t help.

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