Millions Lost in Private Keys Hack: 3 New Ways To Prevent An Attack

Earlier this month, over $5 million was drained from thousands of wallets that interacted with the Solana blockchain. This unprecedented attack resulted from faulty software wallets that compromised users’ private keys. Previously, many believed this kind of hack was impossible, but now crypto holders everywhere are questioning if interacting with a blockchain can ever be safe. 

Unfortunately, crypto transactions are irreversible, so nothing can be done to refund the affected users. Fortunately, we can learn from this incident and take measures to ensure that our private keys are truly secure. Three methods to prevent an attack on private keys include:

  • Never import keys from one wallet to another
  • Use a hardware wallet
  • Use a software wallet that offers advanced security features – like the MantlePlace wallet by AssetMantle

When crypto enthusiasts get started with self-custodial wallets, they often use whichever wallet is most popular. After some time, they may discover that the most popular wallet doesn’t necessarily offer the best user experience. They then find another that they prefer and import their seed phrases into it to access their existing funds. That’s what happened in the case of the recent Solana hack. 

On August 3rd, Solana developers confirmed that users’ private keys were compromised when they “created, imported, or used [them] in Slope mobile wallet applications.” As a result, users shouldn’t reuse their private keys across applications to prevent this attack. Instead, users should just create a new wallet and transfer funds when they want to switch to different wallets. 

Only those who utilized software wallets were affected by the attack on Solana’s users. That’s because hardware wallets securely store private keys off-chain, making it difficult, if not impossible, for the private keys to be compromised unless a holder gives them to a hacker. 

Hardware wallets designed by Ledger and Trezor have been popular since crypto’s 2017 bull run. They start at around $80 before shipping and range up to $250. That’s a small price to pay to protect your future value, but many users aren’t ready to invest in their security. 

The MantlePlace wallet, designed by AssetMantle, offers a free software solution for protecting your key phrase. MantlePlace generates the mnemonic phrase at the back end but only stores 20 out of the 24 words. It sends the 4 remaining words to the end user to record or memorize. By doing so, MantlePlace protects users from attacks like the one on Solana.

A representative of AssetMantle told CryptoMode, “Our wallet never has all of the user’s details. So if a breach like this were to happen on AssetMantle, the last four words of the mnemonic would be missing, and the private keys wouldn’t be exposed because they’re encrypted with the user’s password.”  

Put simply, this means that in the worst-case scenario, if AssetMantle’s database were compromised, hackers would still be unable to access any funds. Sadly, AssetMantle’s secure software wallet is only available on its beacon chain, but that might be enough reason for Solana’s NFT enthusiasts to switch. 

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