Algorand-based wallet provider MyAlgo has cautioned users to withdraw assets from all wallets created with a mnemonic phrase as the company continues investigating an exploit that led to a $10 million loss.
The wallet provider tweeted on February 26, warning users that “a targeted attack was carried out against a group of high-profile MyAlgo accounts.”
MyAlgo Urges Users to Withdraw Funds
MyAlgo further explained that the attacked users had significant amounts of assets in their accounts and were using mnemonic hot wallets with private keys stored in the browser. The exploit did not affect hardware wallet users, the team added.
The wallet provider said it was working with affected parties and authorities to investigate the incident. However, in a Monday update, the team strongly advised all users to transfer any funds from seed phrase wallets stored in MyAlgo as it still does not know the root cause of the hacks.
IMPORTANT: ??We strongly advise all users to withdraw any funds from Mnemonic wallets that were stored in MyAlgo. As we still don’t know the root cause of recent hacks, we encourage everyone to take precautionary measures to protect their assets. Thank you for your understanding.
— MyAlgo (@myalgo_) February 27, 2023
Over $9 Million Stolen
According to blockchain investigator ZachXBT, the hacker stole 19.5 million ALGO and 3.5 million USDC valued at $9.6 million from victims.
However, centralized exchange ChangeNow was able to freeze $1.5 million of the stolen funds after the attacker tried to launder the assets through the platform.
I haven’t seen many posts about this on CT yet but it’s suspected over $9.2m (19.5M ALGO, 3.5m USDC, etc) has been stolen on Algorand as a result of this attack from Feb 19th to 21st.
ChangeNow shared they were able to freeze $1.5m. https://t.co/BPCXTUD57n pic.twitter.com/A3t7Ss0e83
— ZachXBT (@zachxbt) February 28, 2023
Algorand’s chief technology officer John Wood noted that the incident affected 25 wallets while clarifying that the exploit was not caused by an “underlying issue with the Algorand network or SDK.”
The CTO stated that he would make an explainer video covering how the exploit happened and how users can protect themselves once the investigation is concluded.