A $5.7 million crypto heist has sent social tokens into free fall. It seems to be because of a compromised Roll wallet.
A hack early in the morning UTC sunk the value of many social tokens minted and distributed on the platform by over 50% in price as the attacker made off with 3000 ETH or around $5.7 million.
At around 8:16 AM UTC, MyCrypto.com tweeted that “there was some sort of widespread hack/compromise across various social coins, leading to a massive dump.”
A social coin backed up by NFT assets, WHALE, confirmed the hack an hour later, tweeting that “2.17% of $WHALE was compromised by a hack on our social token issuer’s hot wallet.” In the next tweet, WHALE announced that it has secured the rest of its tokens in a cold storage.
As a response, Roll has suspended withdrawals of the social money from its Roll wallets and set up a $500,000 fund to help out the affected creators and communities.
What really happened?
It seems like a robbery. Etherescan showed that hundreds of ETH have been transferred into Tornado Cash, a privacy tool commonly used by hackers to cover their tracks.
Roll stated today that the attack was the result of a compromised Roll wallet.
An analyst from The Block, Igor Igamberdiev, stated that the attacker forced the victims to approve the transfer of all the tokens.
When the wallet’s security has been compromised, the attacker sold off their stolen social tokens and then funneled the proceeds to a hidden destination.
Roll didn’t mention how the private keys have been compromised but later stated that it is “really sorry.”
“Today we messed up,” it continued
What are Social Tokens?
Social tokens are ERC20 tokens minted by crypto’s socialites.
Through the token sales to loyal fans, the influencers can now generate income while offering their supporters a bespoke currency.
The coins are not totally useless. Holders can redeem them for goods and services, like voting on their favorite socialite’s life or career decisions, or just trade them with other cryptocurrencies.
There are a few social money platforms, but Roll, the creation of former Coindesk analyst Bradley Miles, was the first to put up a one-stop-social-crypto-shop. By the summer of the previous year, Roll launched around 160 different social tokens.
Brooklyn99 actor Terry Crews had made headlines early this week when he launched his own $POWER token on Roll.
Commenting about the incident, Roll stated that it is beefing up its infrastructure, getting its code audited and working with the police.
“Our goal is to come back stronger than ever.”
CEO Bradley Miles
However, Roll’s competitor, Rally, had a good day indeed. The price of its RLY token has surged to over 15%, just as Roll’s tokens were reeling.
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