The Fantom Foundation, responsible for the Fantom blockchain platform, has effectively mitigated a severe security issue after a hacking event in October that resulted in a $550,000 loss.
The foundation encountered a security breach in its hot wallet on October 17, leading to an unauthorized withdrawal of 1% of its funds by an unidentified hacker. In reaction, the foundation discontinued the use of some compromised wallets and reassigned them, indicating a targeted nature of the attack.
Subsequently, a security researcher discovered an additional vulnerability related to the hack and notified the Fantom Foundation, as mentioned in a November 20 blog post. This vulnerability involved an inactive admin token in Fantom’s ERC-20 FTM contract on the Ethereum blockchain, which could have allowed the hacker to create extra Fantom tokens.
The foundation estimated the potential loss from this vulnerability at $170 million, based on the token’s price during the hack. They also acknowledged that the market might not have been able to absorb such a large influx of tokens.
In response to this threat, the foundation promptly resolved the issue and rewarded the researcher who identified the vulnerability with $1.7 million, recognizing their vital role in averting a larger crisis.
Despite the recent hack and a significant financial loss, the Fantom token has experienced a notable increase in value over the last month. The token’s price has climbed to $0.31, an 82% rise since the hack, as reported by CoinGecko. Additionally, the token has witnessed a 78% growth in value over the past year.
Launched in late 2019, the Fantom network is a blockchain protocol tailored for creating and running decentralized applications. The Fantom Foundation’s Opera blockchain is a permissionless platform compatible with the Ethereum Virtual Machine, enabling interactions with the Fantom network through various wallets, including MetaMask.
This incident is not the first security issue for the Fantom Foundation. In July 2023, the foundation suffered a substantial loss of $126 million due to a multichain bridge hack. Post this event, Fantom’s creator Andre Cronje highlighted a misalignment between the perceived and actual security levels of the Multichain platform, which shut down operations in mid-July 2023.
