Solana wallet ‘eaten’ in blow to crypto network

Thousands of crypto accounts linked to the Solana blockchain have been “drained” into one of the largest networks in the digital asset market in one fell swoop.

Solana and several other platforms linked to the blockchain investigated Wednesday morning an exploitation of the system loophole that affected at least 7,767 digital wallets, the computer programs that store traders’ crypto tokens, according to one of Solana’s Twitter accounts.

The exploit marks a setback for Solana, which is widely seen as one of the most promising blockchains in the crypto industry. The digital ledger has been touted as one of the crypto industry’s potential long-term winners because it is built to process thousands of transactions per second.

“Engineers from multiple ecosystems, with the help of several security companies, are investigating empty wallets on Solana,” the group said on Twitter.

It said wallets that allow traders to keep their coins offline rather than using online applications do not appear to have been affected.

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Phantom, a wallet app built on Solana, and Solana non-fungible token marketplace Magic Eden were among the providers who said they were affected by the apparent hacking incident.

Solana Labs, a developer of the Solana blockchain, is backed by major groups in traditional and cryptocurrency markets, including venture capital firm Andreessen Horowitz, fast trading retailer Jump Trading, and Sam Bankman-Fried’s Alameda Research.

Solana is designed to process up to 50,000 transactions per second, a scale much larger than rivals including bitcoin and ethereum, and comparable to established traditional financial services such as the Nasdaq exchange. In January, analysts at Bank of America said Solana could “become the visa of the digital asset ecosystem”.

However, Solana has suffered from processing issues that have tarnished its reputation. In June, the entire Solana network went down for four hours, a failure documented on the network’s official status website.

The blockchain’s eponymous native coin is down nearly 80 percent so far this year, outpacing the declines sustained by its bigger rivals bitcoin and ether.

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