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Solana wallets ‘drained’ in blow to crypto network

Thousands of crypto accounts linked to the Solana blockchain have been “drained” in a blow to one of the biggest networks in the digital asset market.

Solana and several others products linked to the blockchain were on Wednesday morning investigating an exploitation of its system loophole that affected at least 7,767 digital wallets, the computer programs that store traders’ crypto tokens, according to one of Solana’s Twitter accounts.

The exploit marks a setback for Solana, which is widely seen as one of the most promising blockchains in the crypto industry. The digital ledger has been touted as one of the potential long-term winners of the crypto industry because it was built to handle thousands of trades a second.

“Engineers from multiple ecosystems, with the help of several security firms, are investigating drained wallets on Solana,” the group said on Twitter.

It said wallets that allow traders to hold their coins offline rather than using online applications, did not appear to have been affected.

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Phantom, a wallet app built on Solana, and Solana non-fungible token marketplace Magic Ethen were among the providers that said they were affected in the apparent hacking incident.

Solana Labs, a developer of the Solana blockchain, is backed by big groups in traditional and cryptocurrency markets including venture capital company Andreessen Horowitz, high-speed trading shop Jump Trading, and Sam Bankman-Fried’s Alameda Research.

Solana is designed to process up to 50,000 trades a second, a scale far in excess of rivals including bitcoin and ethereum, and on a par with established traditional financial services such as the Nasdaq stock exchange. In January, Bank of America analysts said Solana “could become the Visa of the digital asset ecosystem”.

However, Solana has been beset with processing glitches that have tarnished its reputation. The entirety of the Solana network went dark for four hours in June, an outage that was documented on the network’s official status website.

The blockchain’s eponymous native coin has tumbled almost 80 per cent so far this year, bigger than the drops sustained by its larger rivals bitcoin and ether.

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