Gnus.AI recently suffered a token-minting exploit, which caused the loss of approximately $1.27 million. The exploit happened because an attacker gained access to a critical team account's private key, allowing them to create and sell fraudulent tokens on the Ethereum network. In response, Gnus.AI plans to introduce a new version of the GNUS token. Hundred Finance and Kronos Research also suffered big losses due to cyberattacks over the past year, and their respective attackers have started moving the stolen funds around.
Token-Minting Hack Strikes Gnus.AI
The Gnus.AI artificial intelligence network suffered a loss of approximately $1.27 million due to a token-minting exploit on May 5. In response, the team announced the introduction of a new version of the Genius (GNUS) token. The Gnus.AI team also urged users to completely stop purchasing the old version of the token.
The exploit was executed by an attacker who managed to get the private key to a critical team account. This allowed them to create a fraudulent version of the GNUS token on the Fantom network using the Axelar bridge protocol. Thereafter, they minted 100 million counterfeit tokens, which were then sold on the Ethereum network, causing a big price drop and financial losses for existing token holders.
The CEO of Gnus.AI, who is also known as "SuperGenius," revealed that the security breach was linked to compromised private Discord communications in the team. As part of a remedial effort, Gnus.AI plans to infuse $1 million into a liquidity pool for the new token that will consist of $500,000 in Ether and an additional $500,000 in locked fees, aiming to cover at least 80% of the losses.
Blockchain security firm CertiK estimates that the total financial impact of the attack was around $1.27 million. Despite the ongoing exploits in blockchain networks, CertiK did point out that attacks are actually decreasing. In fact, April was the month with the lowest total losses from exploits since 2021.
What is Gnus.AI?
GNUS.AI is a blockchain-based platform that is designed to optimize the underused processing power of computing devices, from mobile phones to gaming consoles. By participating in the GNUS.AI network, users contribute their idle GPU resources in exchange for GNUS tokens, incentivizing the democratization and decentralization of AI and machine learning processing.
The system integrates blockchain technology with artificial intelligence to build a robust and flexible network that spans various applications and gaming environments. This network is made up of decentralized nodes that work together to process data efficiently and securely. Users engage with the network through applications or systems that have integrated with the GNUS.AI SDK, which is compatible with numerous operating systems including Windows, OSX, iOS, Android, Linux, and various gaming platforms as well.
GNUS.AI not only promotes faster blockchain transactions but also focuses on organic growth by reducing user acquisition costs and encouraging frequent use through its incentivization model. The platform offers customizable features through a user portal, allowing secure data uploads via AI or machine learning algorithms. With its broad compatibility and integration into diverse devices and systems, GNUS.AI plans to be an essential solution across multiple industries.
Hundred Finance Hacker Resurfaces
Meanwhile, the hacker who stole $7.4 million from the decentralized finance (DeFi) protocol Hundred Finance, has once again become active after a year of dormancy. On May 1, the hacker transferred about $800,000 worth of ETH and USDT from Curve’s decentralized exchange (DEX), after providing liquidity on the platform more than a year ago. After withdrawing the funds, the hacker converted the USDT and other cryptocurrencies into ETH. This ended up boosting the hacker's ETH holdings by more than $1 million.
Currently, the hacker holds assets worth $4.3 million, which includes cryptos such as Dai (DAI), Wrapped Ether, Frax, and Wrapped Bitcoin
Hundred Finance suffered a security breach on the layer-2 network Optimism on Apr. 15 of 2023. The exploit was made possible through the manipulation of exchange rates between ERC-20 tokens and hTOKENS, which allowed the hacker to withdraw more tokens than were deposited. This is known as a flash loan attack, which is a type of exploit in the DeFi world involving uncollateralized loans used to distort crypto prices on DeFi platforms.
Hundred Finance also suffered a hack in 2022 on the Gnosis Chain, where $6 million was lost because of a reentrancy attack.
Kronos Research Hacker Begins Moving Stolen Crypto
The hacker responsible for the $25 million exploit of Kronos Research in November of 2023 also began moving the stolen funds almost six months after the incident.
At first, the hacker transferred 1,314 ETH, valued at close to $4 million, from their original wallet to a new address. The funds were then moved to another address and then broken down into smaller amounts, with 10 transactions of 100 ETH each being sent to Tornado Cash. This service is very often used by hackers to launder money by making the tracking of funds a lot more difficult.
Tornado Cash has subsequently been under a lot of scrutiny, which led to sanctions being imposed against the platform by the U.S. government in August of 2022 because of its use for illegal activities. In 2023, the founders of Tornado Cash also faced charges related to money laundering and violating sanctions.
PeckShield, a crypto analytics firm, first alerted the public about the movements of the stolen Kronos Research funds. Historically, exploiters have preferred using crypto-mixing services instead of centralized exchanges to avoid detection, as exchanges can block identified compromised addresses.
The exploit of Kronos Research was traced back to unauthorized access to the firm's application programming interface keys. Initially, Kronos Capital denied any fund losses, but investigations led by on-chain investigator ZachXBT later confirmed the theft of approximately 12,800 ETH. After the revelation, Kronos Capital suspended its trading services to investigate the breach.
What are Crypto Mixers?
Crypto mixers, also known as tumblers, enhance transactional privacy by mixing coins from various sources, making it very difficult to trace specific transactions. Although cryptocurrencies are pseudonymous and transactions are recorded on a public blockchain, true anonymity is not really guaranteed at all. This visibility can potentially link transactions to real-world identities using blockchain analysis tools.
While not inherently illegal, the legality of crypto mixers varies by jurisdiction. They are often scrutinized because they can be used for illegal activities like money laundering. Major financial authorities, like the US Financial Crimes Enforcement Network (FinCEN) and the EU, have regulations that make the use of mixers a bit more complicated for those looking to be private when it comes to their crypto dealings.
In response to these issues, some users might decide to rather use inherently private cryptocurrencies like Monero, which offers built-in anonymity, or Zcash, which provides the option of stealth addresses for more private transactions.
