Mar 07, 2023

MyAlgo Urges Users to Withdraw Funds Amid Security Breach

MyAlgo, a wallet provider for the Algorand network, has once again urged users to withdraw their funds or rekey their accounts as soon as possible following a security breach in February that has yet to be resolved. Decentralized exchange Algodex has also reported that a malicious actor infiltrated one of its company wallets on March 5, which appears to be similar to the events taking place in the Algorand ecosystem.

In a March 6 post, Algodex explained that the malicious actor infiltrated a company wallet during the early hours of the previous morning. Algodex had taken precautions prior to the attack, such as moving the bulk of its USD Coin (USDC) and native Algodex (ALGX) tokens to secure locations. However, the infiltrated wallet was still connected to Algodex’s liquidity rewards program and was responsible for providing extra liquidity to the ALGX token.

As a result of the attack, the malicious actor was able to remove the Algo and ALGX tokens in the Tinyman pool created by Algodex to provide additional liquidity to the ALGX token. The exchange noted that $25,000 in ALGX tokens allocated to provide liquidity rewards were taken but said it would replace this in full. The total loss from the theft was less than $55,000, but Algodex users and the liquidity of ALGX were not affected.

MyAlgo, on the other hand, has had multiple warnings issued since a Feb. 19-21 security breach that resulted in losses of around $9.2 million. On Feb. 27, the MyAlgo team tweeted a warning of a targeted attack against a group of high-profile MyAlgo accounts conducted over the past week. The cause of the wallet hack was unknown, and MyAlgo encouraged “everyone to take precautionary measures to protect their assets” by transferring funds or rekeying accounts.

John Wood, chief technology officer at the networks governance body, the Algorand Foundation, went on Twitter the same day, saying around 25 accounts were affected by the exploit. He noted that “this is not the result of an underlying issue with the Algorand protocol or SDK.”

With the continued security breaches in the Algorand ecosystem, users of MyAlgo and other wallets should take extra precautions to protect their assets. It is recommended that users withdraw their funds or rekey their accounts to new ones, as well as transfer tokens to a brand new, non-MyAlgo wallet and rekey to a cold wallet for extra security.

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