- Ethereum’s protocol, Loopring, has experienced a security breach with losses amounting to $5 million.
- The Loopring team, in collaboration with Mist security experts, is determined to find out how the 2FA service was compromised.
- Heyden Adams suggested that Ethereum layer-2 blockchains prioritize immutability.
Loopring, an Ethereum zero-knowledge roll-up protocol, reported a major hacking assault on its smart wallets on May 9th. The assault is linked to the Loopring Official Guardian. The initiative now collaborates with security and law enforcement organizations to investigate the breach and identify offenders.
Loopring Statements on Attack
According to Loopring, the hacker started the Recovery procedure, acting as the wallet owner to reset ownership and withdraw money.
Loopring also stated,
The assault was successful because it compromised Loopring’s 2FA service, allowing the hacker to impersonate the wallet owner and obtain clearance for Recovery from the Official Guardian. The attacker then moved assets from the impacted wallets.
Loopring Working with Law Enforcement
Meanwhile, Loopring is trying to identify the problems behind this attack. The firm stated that it collaborated with blockchain security startup SlowMist to investigate how its 2FA service was hacked. The team has temporarily paused Guardian and other 2FA-related work.
Also added a post in their X:
Loopring is working with law enforcement and professional security teams to track down the perpetrator. We will continue to provide updates as soon as the investigation progresses.
Uniswap Founder Insights about Ethereum L2s
After the attack happened on June 9th, Uniswap founder Hayden Adams has expressed his thoughts on the Ethereum L2 chain, “Ethereum L2 should not be immutable.” It has been ten years, and L1 is still not ready for immutability.
He suggested that the L2 chain, which focuses on Ethereum scalability, should not prioritize immutability until the Ethereum blockchain is complete. Also added it “makes zero sense” to expect layer 2 networks to never be upgraded again or force mass migrations.
Loss of $5 Million
According to Santiment’s post on X, Loopring’s network was hacked by a breach worth more than $5 million, equivalent to 1373 ETH. The project’s market capitalization has decreased as trust in the crypto community has dwindled. This causes FUD(Fear Uncertainty and Doubt), likely compounding the -22% $LRC 4-day drop.
When news of the attack became public, Loopring’s native token, LRC, experienced little fluctuation. At press time, the price of LRC was $0.2095, down 2.7% in the previous 24 hours and 18% in the last 7 days.
