55 ETH Stolen: AiXBT Wallet Breach Triggers 20% Token Drop

In a recent security breach, AiXBT’s AI-powered trading platform fell victim resulting in the loss of 55 ETH. The breach occurred when an attacker gained access to the autonomous system dashboard and queued malicious replies, which led to the unauthorized transfer. The hacker, operating under a now-deleted X account known as “FungusMan,” exploited the system’s Simulacrum wallet, a tool designed to facilitate on-chain actions through social media posts.

AiXBT’s pseudonymous developer, rxbt, confirmed the incident, explaining that the hacker accessed the secure dashboard for the AiXBT Agent’s autonomous system at around 2 AM UTC. From there, they queued two malicious replies that ultimately triggered the transfer of funds from the Simulacrum wallet. Despite this setback, rxbt reassured the community that the exploit did not compromise the platform’s core systems and was not a failure of the AI itself.

Quick Response from the AiXBT Team

Following the breach, the AiXBT team acted swiftly to control the situation. They reported the hacker’s wallet address to centralized exchanges, switched access keys, and began the process of migrating servers. In a post responding to the incident, AiXBT stated, “Simu wallet was cooked, but core systems unaffected. If you’re trading AIXBT, this doesn’t change fundamentals. Expect improved security after server migration.”

While these efforts helped contain the damage, the exploit has sparked concerns among traders and observers, raising questions about vulnerabilities in AI-driven trading systems. However, it’s worth noting that the AI agent functioned as intended, with existing safeguards in place. The incident was a result of unauthorized dashboard access, not a systemic failure.

A Steep Price Drop for AiXBT 

Despite the team’s quick action and assurances, the exploit had an immediate impact on the market. AiXBT’s Base token plunged drastically, declining by almost 20% within one day to $0.0938. The market cap of the platform is currently $82.4 million, far from its mid-January peak of $755 million.

Although the subsequent financial loss from this attack represents a small fraction of the platform’s total market capitalization. However, the price decline is a reflection of the market’s anxiety regarding security risks, even though underlying systems remain intact.

Looking Ahead: Security and Confidence 

As per the Virtuals Protocol, AiXBT has become an AI-driven market commentator, providing real-time commentary on crypto trends. It has been a huge hit since its launch at the end of last year, with nearly half a million X followers. Traders who hold AiXBT tokens receive access to the AiXBT Terminal, providing market data and sentiment analysis.

Although this event is a reminder of the dangers of AI-based trading platforms, the rapid response of the AiXBT team and its dedication to enhancing security give hope for recovery. With server migrations and security patches planned, traders and observers will be watching closely as the platform recovers trust and stability in the coming days.