Use ‘Cold Wallets’ to avoid Solana-like hacks : Indian Crypto Exchanges

moneycontrol.com:

Following a major hack in Solana-based wallets in the early hours of August 3, Indian cryptocurrency exchanges said it’s unlikely to impact all Indian Solana traders unless they were using one of the impacted wallets.

Nearly 8,000 wallets were hacked and investors stand to lose over $7 million across Solana-based wallets including Phantom, Slope, and TrustWallet. Several Solana-based tokens like SOL, SPL, and others were stolen.

To give a perspective, Solana is one of the more popular cryptocurrency tokens traded in India. As per CoinSwitch’s CRE8 index, it has been the sixth largest token to be traded in the country over the past 28 days. This, despite more than 10 network outages seen with the token and its blockchain over the last year.

But for the existing traders and holders of the token, the good news is, that this was only limited to certain ‘inactive’ but internet-connected Solana-based hot wallets like Phantom, Slope, and TrustWallet. The phantom wallet was also inactive for the past six months, industry experts said.

What went wrong?

“It is speculation as to who exactly is behind this and what the motive is, but it seems that either there has been like a major private key compromise or a seed phrase compromise that has resulted in such a widespread hack,” Parth Chaturvedi, Crypto Ecosystem Lead, CoinSwitch told Moneycontrol.

“In the case of Solana, it's a wallet related hack. In crypto, there are two concepts that are very important. One is the private key concept. So if you want to access your digital assets, you have to use the private key. Generally, when wallets are being set up, you set up a recovery phrase or a seed phrase. So If I've lost my private key, I can use the recovery seed phrase to generate that key