What was first thought to be a hack of a crypto security company appeared to be a human error that led to the unauthorized minting of the company's token. The token flash-crashed before recovering some of its losses.
This past weekend, Web3 security auditor Hacken said that the human error occurred "during architectural changes." According to them, a private key of an account authorized to mint, or create, tokens was compromised, which allowed it to create HAI, the native token of Hacken, before “dumping” it on a decentralized exchange.
"One big misconception: the deployer wallet was NOT compromised. That’s exactly what let us revoke the compromised minters from the $HAI contract," they said, adding that there is no evidence of any compromise beyond the private keys.
The team estimates that their total loss stands at around $250,000.
Meanwhile, the HAI token crashed by over 90% before rebounding. It's up 8% in a day but still down 37% in a week.
Dyma Budorin, co-founder and CEO of Hacken, took responsibility for the incident, saying that five years ago, he didn't implement a multi-signature bridge, which allows communication among blockchains.
"I understood the risk but delayed bridge restructuring due to not unimportant reasons," Budorin said, stressing that this incident "has nothing to do with the main business."
According to him, the most significant damage is to their reputation.
"What doesn't kill makes stronger. My wife told me I have quite a few grey hairs overnight. I have more bad news for her – no vacation, but very hard work to recover reputation," Budorin said.
He also mentioned that the company's goal was to turn its token into a security token, which would act more like a share of the company and have the flexibility of a crypto asset. These plans might now be accelerated.
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