Hackers recently stole 96 private keys belonging to users of the popular non-fungible token (NFT) gaming ecosystem, Vulcan Forged, leading to the theft of $140 million worth of cryptocurrencies.
The 96 compromised wallets had 4.5 million Vulcan Forged native cryptocurrency (PYR tokens), representing 9% of the tokens’ total supply and 23.7% of the circulating supply, per data on Coingecko.
$PYR Crashes 22% Following Dump
Moments after the attack, the hackers immediately exchanged 2.5 million of the stolen PYR tokens on the popular decentralized exchange Uniswap.
The dumping of a significant amount of PYR on Uniswap caused the value of the token, which was changing hands at $31 before the attack, to be worth $24, shredding a massive 22% of its value.
In a bid to prevent a further loss in value of PYR, Vulcan Forged announced to its community via a Discord post that they should remove funds from various liquidity pools to prevent the attackers from selling, which would continue to wreak further damage on the price.
Not relenting on efforts to swap the stolen PYR for ETH, the attackers have continued to sell the cryptocurrency in smaller fractions and are currently left with 2 million PYR tokens in one wallet.
The project hopes the move will force the hackers to move the remaining tokens to a centralized exchange, where their identities will be revealed since these platforms have the necessary know-your-customers (KYC) requirements.
Users to Get 100% Reimbursement
Vulcan Forged has promised to reimburse the stolen PYR tokens with its LAVA tokens to all affected users, who are advised to get a Metamask wallet for reimbursement.
“We will send emails out to all Vulcan wallets affected today to get a metamask address from you.
We’ll replace your PYR and LAVA from our treasury,” Vulcan tweeted.
At the time of writing, it is still not clear whether other cryptocurrencies were stolen from the heists but it promised to compensate affected users with PYR tokens.
“For those that lost other assets too, including ETH and MATIC, as this was ultimately our responsibility, we will also reimburse those assets in the equivalent of PYR,” the platform noted.
Hackers Exploits Vulcan’s Semi-Custodial Solution
It is worth noting that the attackers were able to gain access to the private keys because the project operates a semi-custodial solution.
Users who register on Vulcan Forged are also given three blockchain wallets on Ethereum, Polygon, and VeChain networks.
Instead of allowing each user to manage his or her private keys, Vulcan Forged keeps the keys for them via its wallet management service Venly (previously known as Arkane Network).
To prevent future occurrences, Vulcan Forged promised to remove the semi-custody solution from its entire ecosystem.
Meanwhile, this is one of the latest crypto heists that has happened in the industry. On Sunday, Coinfomania reported that popular cryptocurrency exchange AscendEx’s BSC, Ethereum, and Polygon hot wallets were hacked to the tune of $80 million.
