As a seasoned crypto investor with several years of experience in this space, I’m deeply concerned about the recent allegations of insider jobs and hacks at X, specifically regarding the compromise of Frax Finance’s account. These incidents have not only shaken the confidence of many users but also raised serious questions about security measures and governance within X.
Sam Kazemian, the founder of Frax Finance, has accused someone with insider knowledge of being behind the hacking of X’s official project account.
As a researcher investigating the incident, I would describe it this way: On June 1, an unexpected event transpired that caused the decentralized stablecoin protocol supporting FRAX USD to lose control over its X account.
Frax Finance Hack
On June 3, Kazemian announced in a Telegram post that the Frax Finance team is confident they’ve pinpointed the individual responsible for certain malicious activities. This person has been labeled as a “repeat offender” by blockchain investigator ZachXBT.
Kazemian assured us, “We’ll do our utmost to identify and punish the individual responsible.” He added that the incident wasn’t caused by any security weaknesses or attempts to deceive the Frax Finance team through phishing methods. Instead, “It was an internal matter,” he stressed.
On June 1st, an unfortunate event transpired involving the Frax Finance X account. In response, Kazemian swiftly turned to his network for help, imploring anyone with a connection to the account or customer service team at X to reach out to him privately. “If you have a direct line to the X account/customer service, please send me a message,” he requested in the wake of the security breach.
If you have a connection to X’s customer service or support team, kindly reach out to me via DM. I’ve discovered that the X account may have been breached, possibly through an inside job or social engineering tactics. No issues have been identified on Frax’s end. Please be cautious and avoid clicking any suspicious X links.
— Sam Kazemian (¤, ¤) (@samkazemian) May 31, 2024
As a security analyst, I would normally recommend users to update their passwords upon detection of account compromises. However, in the case of Kazemian and the Frax Finance incident, he disputed this finding, stating that there was no evidence of password tampering or internal security breaches within their system. Instead, his suspicions fell on potential social engineering tactics or insider involvement at X, implying that the issue may not have originated from a technical standpoint.
From my perspective as an analyst, I’ve observed that the Frax Finance X account has remained active without any recent activity in terms of new posts. The last visible update was following the reported hack. However, neither the X account nor its CEO, Elon Musk, have issued any official statements acknowledging or addressing this security incident as of now.
As a crypto investor using X, I’ve come across comments expressing the importance of enhancing the platform’s cryptographic authentication. Maintaining X as a trusted “home for crypto” relies significantly on this aspect.
Insider Bribes Linked to Pump and Dump Scheme
The most recent cyberattack on Frax Finance is part of a string of incidents involving hacked crypto projects, with suspicions pointing towards insider activity at X. Back in May, a cryptocurrency trader identified as GCR disclosed that his account with X had been breached.
As a crypto investor, I received a warning two months ago from someone connected to Twitter about bribes being offered for access to my account. I immediately strengthened my account security in response. However, it’s disheartening to realize that even with enhanced security measures, there’s still a vulnerability if X employees are selling admin access.
Based on GCR’s report, the hackers gained access to his account through bribing someone, then exploited it to push a fraudulent investment scheme for ORDI and Luna2.
“Exploring the potential link between the Solana ($CAT) meme coin team and last night’s GCRClassic hack incident.”
Minutes before the hack an address tied to them opened $2.3M ORDI & $1M ETHFI longs on Hyperliquid.
Let’s dive in.
— ZachXBT (@zachxbt) May 27, 2024
ZachXBT proposed a possibility that the individuals responsible for creating CAT, a meme token built on the Solana blockchain, could be linked to the hacking incident. Yet, it’s uncertain if this is the same group implicated in the Frax Finance attack.
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2024-06-03 23:30