SWEAT Economy Briefly Falls to Brutal Exploit With 69% of Supply Drained on Near Blockchain

Move-to-earn blockchain project SWEAT suffered a security breach, adding in the almost daily stream of such incidents in the crypto industry. On-chain data shows that multiple SWEAT Foundation accounts were drained on the Near blockchain. The alleged hackers at one point controlled more than 60% of the token’s supply on the network.

Notably, there has been no official confirmation of the exploit from the Sweat Foundation at the time of writing.

On-Chain Verification of Sweat Economy Security Breach

The security incident was first flagged on X by blockchain security startup Blockaid. Further digging provides additional details.

Exploiter’s address: 3be304b2151870b2be88b9de0b80acab921337ad152584138bd852fc6e9ae018

SWEAT Balance: 13.7 Billion SWEAT tokens (approximately $2.6 million at press time)

Percentage of Supply Held in Exploiter Wallet: 69.1%

Although the exact loophole exploited by the attackers remains unknown, early signs suggest a private key compromise or an illegal takeover of core protocol contracts.

For instance, one of the drained Near blockchain accounts is labeled kzvonov. near and could be traced to Kirill Zvonov, a Lead Backend Engineer at Sweatcoin, according to his LinkedIn profile. Another drained account was distributions.sweat, used by the Sweat Foundation to distribute rewards to users of its move-to-earn application.

Worth noting is that the attack affects only the SWEAT token on its native network, Near. The Ethereum-based version of the token holds 1.5 billion of the token’s supply, and has more than 6,800 holders according to Etherscan.

SWEAT Token Price Sees Less Impact, Drops 3% Following Security Breach

In the hours leading up to press time, the price of the SWEAT token has dropped 3%. This drop is considered mild, unlike most cryptocurrencies that drop significantly in the aftermath of a security breach. However, such a minor drop is attributable to the token’s low market cap and poor liquidity conditions.

SWEAT has a $1.5 million market cap and under $1 million in trading volume. Hence, while the hackers hold over $2.5 million worth of tokens on paper, they may largely be unable to liquidate the loot. There is little to no on-chain liquidity available, as evidenced by the hack being able to swap only $20K of the stolen assets for USDC on the Near blockchain.

More to follow….

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