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Crypto market wrap: Altcoin prices handle Solana hack

By Monte Stewart


Photo of coin
Altcoin prices were in the green on Wednesday in spite of the Solana hack. - Photo: Shutterstock

Altcoin prices withstood yet another cryptocurrency hack on Wednesday as millions of dollars’ worth of Solana were stolen.

The market was not spooked after about $6m (£4.9m) was drained from approximately 8,000 wallets containing SOL. Most altcoin prices were in the green as the crypto sector suffered its second major heist this week.

On Monday, more than $200m in cryptocurrencies were stolen from the Nomad bridge.

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Most coins up, Solana down

“This does not appear to be a bug with Solana core code, but in software used by several software wallets popular among users of the network,” said the Solana Foundation on Twitter.

Elliptic, a blockchain security consultancy firm, said on Twitter that the attack began on Tuesday and more than $5.8m was drained. Some USDC and non-fungible tokens (NFTs) were also stolen, Elliptic added.

The Solana coin (SOL) was down about 3% around the time that conventional markets closed in North America on Wednesday. (All crypto price information based on CoinMarketCap data.) But other leading coins were up.

Internet computer (ICP) stood out from the crowd by jumping 18%. But, as was the case on Tuesday, most gains were modest.


Bitcoin stays above $23,000

Bitcoin (BTC) rose about 2% as it stayed above $23,000, while ether (ETH) was flat.

Ripple (XRP), which has gained a lot of attention lately as its parent’s legal battle with the SEC heats up, gained slightly during usual market operating hours but dipped into the red later in the afternoon.

Elliptic said the theft was likely tied to a supply-chain issue that was exploited to steal or uncover private user keys that protect digital assets. Solana said Phantom and Slope wallets were affected due to a weakness in Apple and android mobile apps and Internet browser extensions.


Fireblocks CEO favors wallet mix

Digital assets need to be protected in a combination of direct-custody, (or custodial) and self-custody (or non-custodial) wallets, Michael Shaulov, co-founder and CEO of crypto technology firm FireBlocks told

In a direct-custody situation, a third-party, often a financial institution, controls some of the keys that protect digital assets and their owner protects the others.

In a self-custody situation, the asset owner controls all keys.

Self-custody needs close monitoring 

That means owners have to closely monitor their crypto holdings every day, or have sophisticated knowledge of how to protect them and guard against what is known as “lateral movement.”


3,505.11 Price
-0.620% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


174.43 Price
-0.230% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652


0.59 Price
-1.950% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


0.13 Price
-1.490% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

“A hacker basically lands on one server and then they can, essentially, start blowing through the other servers or laptops that you have in your organization,” Shaulov, whose company’s core business is to protect wallets.

“And, eventually, they can infect the entire network, right. So even if you're using some kind of like multi signature, [multi-party computation-based] approach that is fully self-custody, then you need it architected in such a way that the hackers cannot propagate through your organization. 

Which is very difficult to do in a direct-custody situation, which is mostly how FireBlocks is being delivered to our clients.”


More wallets better than one

Shaulov said FireBlocks was able to repel an attempted hack on a large client. By holding some of the keys, FireBlocks was able to view the abnormal activity and block the wallets, preventing the hackers from extracting funds.

“That’s a really critical difference in terms of what’s happening in the worst-case secenario,” he said. “Also, [direct custody] mitigates insider fraud.  If there is someone malicious within the company that is trying to do something, they don’t have access to 100% of the keys. So, for institutions, I think that direct-custody model works slightly better.”

Chris Terry, vice-president of enter-prise solutions at US-based open lender SmartFi, said the theft of Solana through Phantom shows the risk of connecting your wallet decentralized-finance (DeFi) platforms.

“We always recommend that you never use one wallet for everything,” he said. “Don't be lazy. Create a wallet for each specific task and fund the wallet for that purpose only. That way, if there is a coding bug, you do not spread the risk to your other assets.”

Shadow on SOL's credibility

Mikkel Morch, executive-director of digital-asset investment fund ARK36, said the hack will “definitely cast a shadow over Solana’s credibility as a better alternative to Ethereum – especially when it comes to security.”

It may also boost Ethereum’s cause in the debate over who has the safest and most reliable DeFi ecosystem, he added.

He noted that Solana has recently gained a lot of publicity by launching a crypto-native phone and brick-and-mortar store in New York City.

The initiatives, he said, demonstrate Solana’s desired to become a pioneer of mainstream Web3 adoption.

“But when the company’s core products – its blockchain and its DeFi ecosystem – regularly suffer from downtime and security problems, you can’t help but think that Solana may have got it all backwards,” said Morch.

Markets in this article

Bitcoin / USD
67026.60 USD
-401.85 -0.600%
Ethereum / USD
3505.11 USD
-21.81 -0.620%
Internet Computer to US Dollar
10.2608 USD
-0.1062 -1.030%
Solana / USD
174.4299 USD
-0.4063 -0.230%
Ripple / USD
0.58890 USD
-0.0116 -1.950%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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