The decentralized identity protocol IoTeX is investigating unusual activity linked to one of its token safes after onchain analysts flagged a potential security incident. The project’s team is working to assess the situation and has coordinated with exchanges to trace funds. Onchain investigator Specter estimated losses at roughly $4.3 million, stating a private key may have been compromised. The price of IOTX dropped more than 8% following the news.
Decentralized identity protocol IoTeX confirmed it is investigating unusual activity tied to one of its token safes. In a post on X, the project said its team was fully engaged and working to contain the situation.
The project stated early estimates indicate the potential loss is lower than circulating rumors. “The situation is under control. We will continue to monitor closely and provide timely updates to the community,” the project said.
The response followed claims from onchain investigator Specter that a private key connected to the safe was compromised. The analyst revealed the wallet was drained of several tokens, with losses estimated at roughly $4.3 million.
Stolen funds were reportedly swapped into Ether, with about 45 ETH bridged to Bitcoin. The activity suggested an attempt to convert assets quickly and move them across chains.
IoTeX’s native token IOTX dropped following the incident. The price slid more than 8% over 24 hours to around $0.0049, according to data from CoinMarketCap.
Nearly 80% of crypto projects hit by major hacks struggle to recover, largely due to mismanaged responses. Immunefi CEO Mitchell Amador said many teams are unprepared, leading to delayed decisions and poor communication.
Even after technical fixes, the reputational impact can linger. Kerberus CEO Alex Katz noted serious exploits often result in users withdrawing funds and long-term credibility damage.
