As Solana coin scams increase, Animoca Brands has issued a public notice regarding the compromise of co-founder Yat Siu’s X account.
The official statement clearly states that the recent allegations regarding the launch of the $ANIMOCA token or non-fungible tokens on the Solana blockchain, attributed to Animoca Brands, were the result of malicious activity on the part of the hacker. Kenta, a crypto game streamer, conducted the investigation first.
The Hong Kong-based gaming software company said that, as of now, there are no official tokens or NFT launches associated with Animoca Brands and urged users not to interact with the compromised account. Animoca Brands promised further updates once the account is restored.
Yat Siu and David Kim founded Animoca Brands Corporation in 2014. The company initially focused on mobile game development, but in 2018 shifted its focus to blockchain games and NFTs, becoming a key player in the Web3 space.
Vulnerabilities on the Solana blockchain
This is not the first time the Solana blockchain has been used to run a scam. Solana’s infrastructure exposes users to specific vulnerabilities. A recent case brought by the U.S. Department of Justice has shed light on this issue, with the Justice Department accusing two California men, Gabriel Hay and Gavin Mayo, of running NFT rug draws on Ethereum and Solana, which cost buyers more than $22 million. Such sweepstakes included promoting fake NFT projects like Vault of Gems and Faceless and absconding with investors’ money. This is the largest NFT fraud ever prosecuted by the DOJ. Additionally, Drake, the Canadian singer, also had his account compromised to promote the Solana-based Anita coin.
Why is Solana vulnerable to scams?
Although Solana’s architecture was designed to be efficient, it introduces a number of risks that make it more vulnerable to scams than other networks. The tokenized account structure used by Solana allows attackers to reallocate ownership of assets using specific commands, leaving funds virtually unrecoverable.
Additionally, Solana’s one-stage transaction approval, compared to Ethereum’s multi-phase allocation of contract functions, can result in instantaneous and irreversible losses once a malicious transaction is authorized. The platform’s ability to consolidate multiple sub-transactions into a single approval also increases the risk of invisible thefts.
Fraudsters also take advantage of Solana’s Durable Nonce capability to delay the implementation of fraudulent transactions, thereby avoiding alerts and surprising victims. This, coupled with users’ ignorance of Solana’s operational risks, makes it a prime target for scams.
