As a researcher with experience in blockchain technology and cybersecurity, I find the recent incident involving the Genius (GNUS) artificial intelligence network deeply concerning. The exploit that occurred on May 5, resulting in the loss of approximately $1.27 million, is a stark reminder of the risks associated with decentralized finance (DeFi) projects and blockchain networks.
On May 5, the artificial intelligence network operated by Genius (GNUS) suffered a significant loss of around $1.27 million due to a token-minting exploit. In response, GNUS intends to launch a new version of their token and has advised against purchasing the previous version.
“GNUS is a blockchain platform where users can carry out artificial intelligence tasks and receive compensation in the form of tokens.”
As a researcher studying blockchain security incidents, I’ve come across an intriguing case involving CertiK’s May 6 post regarding a major security breach. The attacker reportedly gained access to the team’s Ethereum account with the starting private key of 0x18. With control over this account, they extracted the “salt” data related to the token on Ethereum. Utilizing the Axelar bridge protocol, they created a counterfeit version of the token on Fantom. Subsequently, 100 million fake GNUS tokens were minted and transferred to Ethereum. These falsified tokens were then sold into the market, leading to a significant price drop. Unfortunately for genuine token holders, their wealth was effectively transferred to the attacker as they received real assets in exchange for tokens that did not exist.
On May 5th, in a post on social media platform X, GNUS CEO “SuperGenius” announced that the 0x18 account had been hacked after an intruder managed to infiltrate the team’s private Discord channel. SuperGenius expressed concern, stating, “It seems the hackers can access our private Discord messages.” As a temporary solution, the team intends to contribute $500,000 in Ether (ETH) from their own resources to the upcoming token’s liquidity pool upon its launch. Furthermore, they will deposit $500,000 worth of fees owed to them but currently locked until February 2025. This adds up to a total compensation of $1 million.
Based on an assessment by CertiK, approximately $1.25 million in funds were taken during the exploit. This equates to around 80% of the total funds being initially distributed.
As a researcher studying blockchain networks, I’ve observed that these systems remain vulnerable to exploit risks. However, recent data suggests that the frequency and severity of attacks may be decreasing as security measures become more effective. According to a report published on April 30 by CertiK, crypto users experienced the smallest amount of losses due to exploits in 2021.
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2024-05-06 21:41