Harmony's ONE token fell approximately 40% on Wednesday after an exploit allowed an attacker to mint around 4 billion new tokens, which is more than a quarter of the token's existing supply. The incident, confirmed by Harmony, occurred early in the Asian trading hours, leading to a significant drop in the token's value to a record low.
Key Details
In response to the attack, Harmony stated it is collaborating with exchanges to freeze funds linked to four specific wallet addresses involved in the minting. The company is also preparing a software update to prevent further unauthorized minting and is considering a rollback of the blockchain to address the newly created tokens. Harmony previously faced security issues, including a $100 million bridge hack in 2022 and a bug that improperly minted about 146.3 million ONE tokens earlier this year.
Background
As traders awaited the U.S. Consumer Price Index (CPI) report, which is expected to influence market sentiment, Bitcoin remained steady, trading around $63,900, up 0.23% since midnight UTC. The broader cryptocurrency market showed little change amid the exploit, with the Fear and Greed index at 38. Brent crude oil prices hovered near $90 a barrel, influenced by recent geopolitical tensions in the region, complicating the inflation outlook ahead of the CPI release.
The incident is likely to weigh on investor sentiment in the cryptocurrency sector, particularly affecting altcoins like Harmony's ONE. The ongoing volatility could lead to increased caution among traders, especially as inflation data is released, which may impact risk assets across the board. Watch for the upcoming U.S. CPI report, scheduled for release at 12:30 UTC, which could further influence market dynamics.
Based on reporting by: coindesk.com