Frax Finance founder claims internal job at X resulted in account hacking

Frax Finance founder Sam Kazemian has alleged that an inside job at X was responsible for hacking the project’s official account.

The breach, which occurred on June 1, caused the decentralized stablecoin protocol behind FRAX USD to lose access to its X account.

Frax Finance Hack

In a June 3 Telegram post, Kazemian mentioned that the Frax Finance team is “reasonably confident” that they have identified the perpetrator, described as a “serial fraudster” known by blockchain researcher ZachXBT.

“We will do everything we can to bring this person to justice,” Kazemian said. He clarified that the breach was not due to any security flaws or phishing attacks targeting the Frax Finance team. “This was an inside job,” he stressed.

The incident unfolded on June 1, when Frax Finance X’s account was compromised. In an effort to regain control, Kazemian urgently contacted his followers on X, seeking help in contacting the platform’s customer service. “If anyone has a hotline to account X / customer service, please email me,” he posted after the hack.

If anyone has a hotline to account X or customer service, please DM me, @fraxfinance The X account is compromised and appears to be within work or social engineering within X as there are no password resets or other issues within Frax. Please be safe and don’t click on any X links!

— Sam Kazemian (¤, ¤) (@samkazemian) May 31, 2024

X typically advises users to change their passwords when a compromised account is detected. However, Kazemian claimed that passwords were not tampered with and that there were no internal security issues within Frax Finance that could have led to the breach. Instead, it pointed to possible social engineering and privileged involvement in X.

As of now, Frax Finance’s X account remains active, but no new posts have been seen since the hack. So far, neither X nor its CEO, Elon Musk, have made any official comments about the breach.

An X user commented on the situation, emphasizing the need to improve the cryptographic authentication features in X to maintain its “home for crypto” status.

Privileged bribes related to the pump and dump scheme

This Frax Finance incident is the latest in a series of hacks targeting crypto projects, allegedly attributed to insider trading in X. In late May, a crypto trader known as GCR reported a similar commitment from your X account.

“Someone affiliated with Twitter notified me 2 months ago that bribes had been made to access my account, and then they strengthened security. But there can be no security if X employees take money to access the administration. GCR said.

According to GCR, the attackers took control of his account through bribery and used it to promote a pump-and-dump scheme involving ORDI and LUNA2.

1/ An investigation on how @ground ($CAT) meme coin team is connected to @GCRClassic last night’s hack.

Minutes before the hack, an address linked to them opened $2.3 million of ORDI and $1 million of ETHFI on Hyperliquid.

Let’s dive in. pic.twitter.com/009BdPBfM1

— ZachXBT (@zachxbt) May 27, 2024

ZachXBT later suggested that the developers behind the Solana-based CAT meme coin may have been involved in this hack. However, it remains to be confirmed whether the same group is behind the attack on Frax Finance.

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