Bittensor Identifies Malicious Package as Cause of $8 Million Drain

cryptonews.com:

Bittensor, a decentralized AI network, experienced a severe security breach on July 2, which resulted in the theft of $8 million worth of TAO tokens.

The OpenTensor Foundation (OTF), the organization behind Bittensor, has taken swift action to mitigate the damage. In its July 3 postmortem report, the OTF identified a malicious package in the PyPi Package Manager as the root cause of the breach.

The compromised package masqueraded as a legitimate Bittensor library but contained code designed to steal unencrypted cold key details, sending the decrypted bytecode to a remote server controlled by the attacker.

Bittensor Community Update

Yesterday at 7:41 PM UTC, we took the decision to place the Opentensor Chain Validators behind a firewall and entered safe-mode on Subtensor due to an attack that affected multiple participants in the Bittensor community.

We have put together a…

— Openτensor Foundaτion (@opentensor) July 3, 2024

The attack began at 7:06 P.M. UTC, with the attacker transferring funds from compromised wallets to their own. By 7:25 P.M., OTF detected abnormal transfer volumes and initiated a “war room” to address the issue.

By 7:41 P.M., validators were placed behind a firewall, and the network entered “safe mode,” halting all transactions to prevent further damage and allowing for a detailed situational analysis.

The breach affected users who downloaded the PyPi Package Manager version 6.12.2 between May 22 and May 29 and performed specific operations such as staking, wallet transfers, or delegation.

– If you hold TAO on exchanges you are not at risk.

– If you installed Bittensor 6.12.2 from source you are not at risk.

– If you used a web wallet you are not at risk.

– If you installed Bittensor 6.12.2 from PyPy but did not