AI-powered Web3 social platform and infrastructure Uxlink has seen crypto tokens collapse over 90% after malicious actors mint billions of fraudulent tokens.
On Tuesday, the project announced that it had identified violations, including multi-signature wallets. The company said a significant amount of crypto was illegally transferred to centralized and decentralized exchanges (DEX).
Uxlink said it reached out to interact to freeze suspicious deposits and reported the incident to law enforcement. In another update, the company confirmed that some of the funds have been frozen with the help of exchanges.
“Most of the stolen assets have already been frozen, and cooperation with the exchange remains strong,” Uxlink said.
From multisig violations to mass token mint
After confirming the violation, Uxlink flagged the attacker that he had started to create a fraudulent token.
Blockchain security company Peckshield said the hackers first minted 1 billion Uxlink tokens and warned traders not to interact with crypto assets. Peckshield said the attacker minted another billion tokens after the first mint.
After these first mints, the hackers continued to make uxlink tokens. Hacken’s Onchain analyst estimated that the hackers had minted almost 10 trillion tokens.
Despite the massive mint, Hacken said the attackers traded 9.95 trillion tokens for about $67,000 worth of 16 ether (ETH). The company estimated the overall losses from the incident were over $30 million.
In response to the fraudulent token mint, Uxlink has been published to Central Exchange (CEXS) in order to temporarily suspend token trading. The company also said it would launch a token swap plan to protect its ecosystem.
Price crashes and twists in attacks
There was a sharp decline in UXLink tokens when a security incident occurred, with 90% dropping from $0.33 to $0.033. At the time of writing, the token had recovered to $0.11.
Meanwhile, Onchain Analysis Company Lookonchain has flagged the loss of over 500 billion Uxlink tokens in a phishing attack while the attacker was busy minting the tokens.
Related: Private user data reports are “unfounded” according to crypto.com
uxlink asks users to stay vigilant and follow official channels
In the update, the company said there were no indications of individual wallets affected by the attack. However, UXLink has encouraged users to maintain alerts and follow only official communication channels as information sources.
The company said it is working on a token swap plan and will announce it soon. “Token swap details and instructions will be announced soon,” Uxlink wrote.
UXLink said in its latest update it has submitted a new smart contract for security audits. The company said the new contracts will have a fixed supply and will prevent new tokens from being created.
The company also said it is working with its security partners to prepare a comprehensive incident report.
magazine: Thailand’s “Big Secret” Crypto Hack, RWA Token for Chinese Developers: Asia Express