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Telcoin Suffers Apparent $1.2M Exploit Related to Wallet Implementation on Polygon; TEL Drops 40%
Affected user balances will be restored as no private keys were stolen in the exploit, the developers said.
The Telcoin (TEL) token price fell 40% in the past 24 hours after an apparent error relating to a wallet implementation on Polygon caused user balances to drop on the Telcoin mobile application. The slide was flagged as an exploit by blockchain security company Peckshield.
The exploiter managed to make over $1.2 million in funds drained from affected accounts, according to messages on Telcoin's community on the Discord online forum. However, these were only from users who had "never initiated transactions" from the Telcoin application, the company said.
STORY CONTINUES BELOW
Telcoin, which develops financial applications, such as trading and remittance tools, based on the Polygon blockchain for mobile-device users, froze its application in early Asian hours on Tuesday, developers said in an X post. In a follow-up post, they said the issue was related to how the application interacted with the Polygon blockchain and that no private keys or sensitive data were leaked.
Update on #Telcoin security incident: We’ve identified the root cause, which was not an issue with the Telcoin Wallet code itself, but with the proxy implementation of the wallet on Polygon - primarily impacting wallets that have never initiated transactions. We have deployed a…
— Telcoin (@telcoin) December 26, 2023
“We’ve identified the root cause, which was not an issue with the Telcoin Wallet code itself, but with the proxy implementation of the wallet on Polygon – primarily impacting wallets that have never initiated transactions,” Telcoin posted on X . “We have deployed a fix to stop further exploitation.”
The team said it planned to restore all wallets to their previous balances prior to turning the application service back on.
UPDATE (Dec. 26, 10:44 UTC): Adds drained funds in second paragraph.
UPDATE (Dec. 26, 15:27 UTC): Rewrites headline, first paragraph to clarify the wallet is a Telcoin wallet implemented on Polygon
Shaurya Malwa
Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis. Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM, BANANA, ROME, BURGER, SPIRIT, and ORCA. He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.
