Telecom app, a decentralized finance (DeFi) platform recently suffered an exploit on its wallets leading to the loss of over a million funds. Following the attack, its native token saw a sharp decline of 34%.
Founded in 2017, Telcoin is a cryptocurrency and blockchain project that uses a combination of centralized and decentralized cryptocurrency features to provide low-cost financial products to users across various countries.
The project brands itself as an “exceptionally affordable” DeFi platform with the mission to empower mobile users with expanded access to the global financial system. They develop financial applications such as trading and remittance tools, based on the Polygon blockchain for mobile-device users.
Details of the attack
On December 26, Telcoin App users noticed a drop in their balances, an issue the platform claimed was caused by the proxy implementation of the wallet on Polygon. According to the Telecoin team, the wallets affected were those who never initiated transactions from the application. The exploit is estimated to have resulted in a loss of about $1.3 million according to blockchain security company Peckshield.
Additionally, PeckShield stated that the TEL token had lost 41% of its value following the exploit news, which is a swift response from the market. However, at the time of writing, data from the price tracking platform Coinstats shows that the token dropped to 34% in the last 24 hours, trading at $0.001519.
Telecoin Reply
In response to users’ alarming message, the Telecoin team made a post on the social media platform X (formerly Twitter), acknowledging that they were aware of the situation. As a precautionary measure, they said they have temporarily frozen the application to conduct a thorough investigation into the security breach as well as to avoid additional loss.
In a follow-up post, the team shared that they identified the issue and deployed a fix to stop further exploitation. They added:
“We plan to restore all wallets to their previous balances (for all affected assets) before turning the app service back on, which may take some time. No keys, backend systems, or user data were breached. We will provide another update soon and appreciate everyone’s patience and support”
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