KEY TAKEAWAYS
- Over $86.6 million in digital assets, including ETH, SHIB, LINK, and stablecoins, are at risk due to a compromise in the HECO Chain bridge.
- Blockchain security firm PeckShield reported the breach, indicating an ongoing exploit that prompted the suspension of deposits and withdrawals for investigation.
- Tron founder Justin Sun assures users that HTX will fully compensate for any losses incurred during the security breach.
- The HECO Chain, launched in 2020, aimed to provide a cross-chain experience with lower gas fees, combining Tron and BitTorrent’s ecosystems.
- This marks the second security exploit related to Justin Sun, following the $100 million Poloniex hack in November 2023, raising concerns about the security of his projects.
In a significant security incident, the HECO Chain bridge has been compromised, putting over $86.6 million in digital assets, including Ethereum (ETH), Shiba INU (SHIB), Chainlink (LINK), and stablecoins, at risk.
The breach was reported by blockchain security firm PeckShield, which detected an ongoing exploit on the bridge, leading to the temporary suspension of deposits and withdrawals for a thorough investigation.
PeckShield’s data highlights the involvement of various assets in the breach, with an initial transaction of 10,145 ETH worth $19 million identified.
Subsequent transactions involved assets like USD Coin (USDC), Chainlink (LINK), Shiba INU (SHIB), and more, all transferred to suspicious addresses.
The compromised operator initiated these transactions, prompting PeckShield to alert the community about the suspicious withdrawal activity.
In response to the incident, Tron founder Justin Sun has stepped forward, assuring users that HTX will fully compensate for any losses incurred during the security breach.
Sun emphasizes the security of all funds in HTX, aiming to restore community confidence once the investigation is complete.
The HECO Chain, launched on December 21, 2020, was designed to provide a cross-chain experience with lower gas fees.
It emerged as a merger between Tron and BitTorrent’s ecosystem, orchestrated by Justin Sun in 2022 to enhance cross-chain functionality.
However, the recent security breach has raised questions about the overall security of the HECO Chain and the projects associated with Justin Sun.
This incident is the second security exploit linked to Justin Sun, following the $100 million Poloniex hack in November 2023.
Security analysts suspect compromised private keys as a possible cause for both incidents, emphasizing the need for improved security measures in cryptocurrency platforms.
Justin Sun‘s involvement in these exploits has further heightened concerns about the security protocols implemented in his projects, urging a closer examination of their vulnerability to cyber threats.
Frequently Asked Questions
What is HECO chain’s token?
The endogenous token of the HECO Chain is HT.
What is HECO Chains HPoS consensus mechanism?
HPoS, or High Performance Proof of Stake, is a consensus mechanism used in blockchain networks. It’s a variation of the Proof of Stake (PoS) model.
In PoS systems, validators need to stake a certain amount of the native token to participate in block activities.
HPoS is an enhanced version of PoS, offering scalability and the ability to support large volume transactions without disrupting the service2. It differs from regular PoS in its scalable nature.
In the HPoS mechanism, about 99 nodes can be online at any given time. The system relies on factors like network stability, voting, and the hardware capability of the nodes to determine which nodes are active.
These nodes must produce blocks, or they get demoted.
The HPoS consensus helps improve the efficiency of the network by removing inactive nodes that hinder the blockchain from operating optimally.
In this system, blocks are produced every 5 seconds, which significantly speeds up transaction completion.
How does HECO use HPoS to improve its performance?
The HECO Chain uses the High Performance Proof of Stake (HPoS) consensus mechanism to improve its performance in several ways:
1. High Transaction Speed: HPoS allows for a high transaction speed with a Transaction Per Second (TPS) rate of over 2000.
This means that the network can process more than 2000 transactions per second, which is significantly higher than many other blockchain networks.
2. Low Transaction Delay: The average block interval in the HECO Chain is 3 seconds. This means that a new block is added to the blockchain every 3 seconds, allowing for quick transaction confirmations.
3. High Transaction Concurrency: HPoS supports high transaction concurrency, which means it can handle a large number of transactions happening at the same time.
4. Scalability: The HPoS consensus mechanism supports up to 21 validators. This allows the network to scale and accommodate a large number of transactions.
5. Low Transaction Cost: HPoS has the characteristics of low transaction cost, making it more affordable for users to perform transactions on the HECO Chain.
These features make the HECO Chain efficient and capable of supporting a high volume of transactions, thereby improving its overall performance.
How hackers launder stolen cryptocurrency?
Hackers use a variety of sophisticated techniques to convert stolen cryptocurrency into spendable cash:
1. Using Fictitious Identities: Hackers often use fake identities to set up online accounts. This helps them avoid detection while conducting transactions.
2. Automating Transactions: Hackers use computer programs to automate transactions. This allows for many transactions to take place in a short period of time, making it harder for authorities to track.
3. Depositing Funds into Various Accounts: The stolen funds are deposited into accounts at a variety of virtual currency exchanges and darknet markets. The funds are then withdrawn, which obfuscates the trail of the transaction history by breaking up the fund flow.
4. Chain Hopping: This is a practice where hackers convert one form of cryptocurrency into another. For example, they might convert Bitcoin into an anonymity-enhanced virtual currency (AEC). This makes the transactions even harder to trace.
5. Using Business Accounts: Hackers sometimes use U.S.-based business accounts to legitimize their banking activity1. This can make the transactions appear as legitimate business operations.
6. Crypto Mixers: These are services that mix potentially identifiable or ‘tainted’ cryptocurrency funds with others, to obscure the trail back to the fund’s original source.
7. Intermediary Wallets and Exchanges: Hackers often move stolen funds through intermediary wallets and exchanges. This further complicates the transaction trail and can help the hackers avoid detection.
It’s important to note that while these methods can make it difficult to track stolen funds, they do not guarantee anonymity.
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