AI-driven Web3 social platform and infrastructure UXLink saw its cryptocurrency token plummet over 90% after malicious actors minted billions of unauthorized tokens.
On Tuesday, the project announced it had identified a security vulnerability involving its multi-signature wallet. The company stated that a large amount of cryptocurrency was being illegally transferred to centralized and decentralized exchanges (DEX).
UXLink reported that it had contacted exchanges to freeze suspicious deposits and had reported the incident to law enforcement. In a subsequent update, the company confirmed that some funds had been frozen with the help of exchanges.
"Most of the stolen assets have been frozen, and cooperation with exchanges remains strong," UXLink stated.
After confirming the vulnerability, UXLink noted that attackers had begun unauthorized token minting.
Blockchain security firm PeckShield reported that hackers initially minted 1 billion UXLINK tokens, warning traders to avoid interacting with the cryptocurrency asset. PeckShield stated that the attackers minted an additional 1 billion tokens after the initial minting.
Following these initial mints, the hackers continued to mint UXLINK tokens. On-chain analysts from Hacken estimated that the hackers minted nearly 100 trillion tokens.
Despite the massive minting, Hacken reported that the attackers exchanged 99.5 trillion tokens for 16 Ethereum (ETH), worth approximately $67,000. The company estimated the total losses from the incident exceeded $30 million.
In response to the unauthorized token minting, UXLink publicly contacted centralized exchanges (CEX) to temporarily suspend trading of its tokens. The company also announced it would initiate a token swap plan to protect its ecosystem.
Following the security incident, the UXLINK token experienced a sharp decline, dropping from $0.33 to $0.033, a decrease of 90%. As of the time of publication, the token had rebounded to $0.11.
Meanwhile, on-chain analytics firm Lookonchain noted that while the attackers were busy minting tokens, they lost over 500 billion UXLINK tokens through phishing attacks.
In an update, the company stated there was no indication that personal wallets were affected by the attack. However, UXLink urged users to remain vigilant and only rely on official communication channels for information.
The company stated it was developing a token swap plan and would announce it soon. "Further details and instructions regarding the token swap will be announced shortly," UXLink wrote.
In the latest update, UXLink stated it had submitted a new smart contract for a security audit. The company indicated that the new contract would have a fixed supply, ensuring that no new tokens would ever be created.
The company also mentioned it was working with its security partners to prepare a comprehensive incident report.
Related: UXLINK Security Breach: Over $11 million in assets stolen, centralized exchanges urgently freeze funds
Original article: “UXLink Hacked, Token Plummets 90%, Attackers Phished in Irony”
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