Ethereum Layer 2 Protocol Loopring Experiences a Security Crack in Smart Wallets

Second layer protocol for Ethereum Loopring discovered a security flaw in its Guardian function that might compromise smart wallets and cause users to lose their assets.

Wallets that used the official Guardian function, an important part of Loopring’s security framework, were the most hit by the flaw.

Hackers gained unauthorized access when they started a recovery procedure while pretending to be the owners of legal wallets. Users suffered heavy losses as attackers used this flaw to take over their wallets and reset ownership, subsequently withdrawing their funds.

In the event that a user loses or has their private keys stolen, Loopring’s Guardian function may be activated to help restore access to their wallet. This adds an extra degree of protection. The fact that the attackers were able to get past these safeguards nevertheless makes one wonder how strong the Loopring ecosystem’s present security standards really are.

Loopring, the Ethereum Layer 2 Protocol, has issued a statement quickly after the occurrence, confirming the breach and detailing rapid steps to limit the harm. In order to investigate the source of the vulnerability, the firm has partnered with security professionals and has temporarily disabled the recovery option. Loopring has also promised its customers that it would do everything in its power to stop such assaults in the future.

In order to protect themselves against phishing and other types of social engineering, Loopring has warned all users to check the security settings of their wallets. Until further notice, the business has also asked consumers not to start recovery operations.

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