Hacken Token Plummets 99% After $250,000 Theft Via Private Key Leak

Hacken, a prominent cybersecurity firm, encountered a severe setback when a private key leak allowed unauthorized minting and theft of $250,000 worth of its native Hacken Token (HAI). This incident resulted in a dramatic 99% price crash, highlighting the complexities and risks involved in upgrading decentralized infrastructure.

The breach occurred during architectural changes to Hacken’s blockchain bridge, a critical component enabling cross-chain transactions between Ethereum and BNB Chain. The bridge, originally developed under different market and technological conditions, required a comprehensive redesign to enhance security and functionality. However, this process introduced vulnerabilities that were exploited by a malicious actor. The attacker minted unauthorized HAI tokens and executed a large-scale dump on decentralized exchanges, causing the token’s market value to plummet from $0.015 to $0.000056. Although the token has since partially recovered to $0.00026, the incident exposed critical weaknesses in the firm’s blockchain bridge infrastructure.

Hacken promptly revoked the compromised minter account and regained control of the token contract. Despite these swift actions, the attacker successfully absconded with approximately $250,000 worth of tokens. The firm emphasized that its core infrastructure remains secure and isolated from the compromised token minting process, mitigating further systemic risk. Hacken CEO Dyma Budorin stated that the incident primarily damaged the company’s reputation, with no evidence of compromise beyond the leaked private keys.

Redesigning and migrating deployed bridge contracts involves intricate legal and technical challenges, which can inadvertently introduce vulnerabilities. To mitigate ongoing risks, Hacken has temporarily suspended bridge transactions on both chains and cautioned users against fraudulent airdrop claims circulating on social media. The firm is committed to enhancing its security protocols and conducting rigorous infrastructure audits to prevent similar incidents in the future.

In response to the hack, Hacken announced that tokens acquired on affected networks post-incident will not be supported under the forthcoming tokenomics framework. The company’s strategic vision is to evolve HAI into a regulated security token that represents equity in Hacken, blending traditional financial rights with blockchain-based flexibility. This transition aims to align HAI holders with Hacken’s equity shareholders, providing a more robust and compliant financial instrument. Legitimate token balances remain fully traceable, and users will be offered a token swap option in the near future, ensuring a smooth migration to the new token structure.

The Hacken incident is part of a broader trend of escalating crypto security breaches. Recent exploits, such as the Meta Pool liquid staking protocol hack resulting in a $27 million minting attack, underscore the persistent vulnerabilities in decentralized finance (DeFi) ecosystems. These events emphasize the critical need for enhanced security protocols and rigorous infrastructure audits as blockchain projects scale and innovate.

The Hacken private key leak and subsequent token theft serve as a stark reminder of the inherent risks in blockchain infrastructure upgrades, particularly in cross-chain bridges. While Hacken has taken decisive steps to contain the damage and safeguard its core systems, the incident highlights the importance of robust security measures and transparent communication with the community. Moving forward, Hacken’s plan to transform HAI into a regulated security token reflects a strategic pivot towards greater compliance and investor protection, setting a precedent for other projects navigating similar challenges.