Someone lost $21 million on Hyperliquid due to private key leak

[_act_]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

[casey15]

It may not necessarily be hackers though... It could be that he digitally stored the private keys online.. which is prone to been leaked..Offline storage is still the best when it comes to confidentiality of private keys... However he shouldn't have left such huge amount on the wallet... It's an act of incompetence from his part

[ColdLava40]

I've been hearing about Hyperliquid for a while now. While it's a centralized token, that might not be why its owner's wallet was compromised.
​It's more likely the owner failed to keep their coins secure. Storing such a large amount on a hot wallet is extremely risky and definitely not ideal. Hackers often target wallets with significant funds, and a hot wallet is easier for them to identify since it's used frequently. A likely cause for the compromise could be that the owner used an unreliable, unknown altcoin wallet. Many of these wallets are known to be compromised. If you aren't careful, you can end up inadvertently giving scammers direct access to your coins.

[joniboini]

Sadly, I can't read further because I'm not logged in to Twitter. But is there any explanation for why the suspected cause is a private key leak?

At the end of the day, the moral of the story is the same as others (if the victim's private key was exposed). Don't store your wealth on a hot wallet, don't store your recovery phrase on cloud storage, etc.

[robelneo]

Even if he is a whale, it will still hurt him. The amount is so huge that it will make headlines and raise awareness about the risk of connecting our hot wallet to any platform or securing our private keys.
When you have a large amount, it should be stored in a cold wallet. If you’re a big trader, you should take all the necessary precautions to protect your private keys and funds.
You are your own bank, so you should be knowledgeable in protecting your assets, especially if you're an active trader.

[sunsilk]

It may not necessarily be hackers though... It could be that he digitally stored the private keys online.. which is prone to been leaked..Offline storage is still the best when it comes to confidentiality of private keys... However he shouldn't have left such huge amount on the wallet... It's an act of incompetence from his part

I cannot find any leads to it and I'm not also logged in to X and that's why I can't read the comments.

But, this makes sense. It's possible that the private keys were stored online or with a cloud platform and then hackers have taken advantage of it and checked every single of it and might have a note in it.

Maybe he forgot about transferring it to a cold wallet and got confident of keeping it there without having any trouble for so long.

[Patikno]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

I have been trying to figure out the exact cause of the private key leak, and I have checked several sites regarding this news, but I haven't been able to find the main reason for the hack, there are only a few guesses. However, I suspect the main cause is user negligence in keeping their private key, and cases like this usually occur due to user error, but if this case occurs due to direct hacking (or without prior user authorization), then I think this will be very surprising, and we need to make it a valuable lesson to prevent the same thing from happening again, even so, any news is actually important for us to know.

[Cryptohygenic]

Sadly, I can't read further because I'm not logged in to Twitter. But is there any explanation for why the suspected cause is a private key leak?

I went through the post on the X platform but did not state how the private keys was leaked and it has also become pondering how that was possible to happen.

At the end of the day, the moral of the story is the same as others (if the victim's private key was exposed). Don't store your wealth on a hot wallet, don't store your recovery phrase on cloud storage, etc.

Yeah the lessons from everyone messed users on the course of loosing their coins in anyway should be treated as heavy warning to others so that they don't fall same victim or similar that could had simply be avoided.
The internet has never been a safe place to store private keys and so likewise the hot wallets is also not a safe on-chain networks to hold funds especially for too long time because the risk of loosing your funds with the unrevealed scammers strategies there is likely unlimited to risks which malwares can also be a way of stealing your funds by hacks even without the need of getting your seed phrase because you can unknowingly fall to their disguise and hidden malwares tools launched in the internet roaming on who to victimized.

[BlackBoss_]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

When using non custodial wallets and connecting it to any or many platforms for trading with smart contracts, it's risky. On the Internet, many threats and bad people are waiting for your mistakes, carelessness to steal your private keys, mnemonic seeds, and compromise your wallets and funds inside.

This is a big loss but not a first accident in history and with trendy growth of altcoins and DEX, Perp DEX, people must learn about risk of smart contracts and how to revoke smart contract approvals.

How to Revoke Token Approval.

[Oshio-man]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

Maybe is the family member who knows where the private keys are kept because it will be difficult for someone not to create a solid privacy for this kind of huge amount of funds, I don't think hackers will get access to this wallet without the information of one of the family member that know the secret because he or she know that he will get a big share in that $21 millions if the hackers succeed, and we have such bad people among our family worldwide, I don't know why some people will still be using hot wallet to hold huge amount of funds because their security is not to guarantee for long term compared cold wallet you can find standard security that will make you not to worry yourself for the long term you want to hold your coins.

[Chinesebaby]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

It's said this user has to lose over $21million worth of crypto to a hacker due to hyper liquidation. But I think this can only be possible with the help of an insider who knew he had such a huge amount of crypto in his wallet. Because it doesn't make any sense that fund stoled in a non custodial wallet lost like that without a bridge of wallet security. So I'm still finding it difficult to believe this.

[hugeblack]

I did a little research, and it appears the cause was excessive permissions granted by the user to the platform's lending protocol (there are claims it was a phishing link).

since the target was a single trader, Hyperliquid is not directly responsible. However, we should always review and approve unnecessary permissions before linking our wallet, and avoid linking it to any untrusted sites or revoking those permissions after completing a trade.

[passwordnow]

I did a little research, and it appears the cause was excessive permissions granted by the user to the platform's lending protocol (there are claims it was a phishing link).

since the target was a single trader, Hyperliquid is not directly responsible. However, we should always review and approve unnecessary permissions before linking our wallet, and avoid linking it to any untrusted sites or revoking those permissions after completing a trade.

Oh, so that's what happened. We should be careful with the permissions and approvals that we're granting from the apps or software that we have. If it's coming from another link, the phishing link, it will suck automatically all that he's got after that approval. It's sad that he has to lose this amount of money. I'd keep this amount safe and will have it stored on a safer wallet and will only access it if I have to sell, won't probably trade on any of these perps dexes.

[Outhue]

You can read about it on X
https://x.com/PeckShieldAlert/status/1976577386469839269

What I do not understand is how the private key got leaked. I am still not thinking that this has to do with Hyperliquid but I think it was the victim noncustodial wallet that was compromised by hackers without any link to Hyperliquid.

That amount of money is too much on a hot wallet. He supposed to leave just the amount of money he is using to trade on the hot wallet which he is connecting to Hyperliquid while leave the remaining on a cold wallet.

Getting compromised via hyperliquid means the victim landed on a wrong link using his wallet, this is why I hate using my main wallet to do transactions on the blockchain, there should be a separate wallet for Dex or CEX  transactions and trading, I am not certain that this is the case but it looks like it.

If this is a direct attack like someone found his private key in his shelf or home it would have never involved hyperliquid, since hyperliquid is involved I am guessing that this person use his hardware wallet or whatever wallet they got to make some fake blockchain calling and he got drained.

[TastyChillySauce00]

I did a little research, and it appears the cause was excessive permissions granted by the user to the platform's lending protocol (there are claims it was a phishing link).

since the target was a single trader, Hyperliquid is not directly responsible. However, we should always review and approve unnecessary permissions before linking our wallet, and avoid linking it to any untrusted sites or revoking those permissions after completing a trade.

Unfortunately with EVM there's too many ways we can lose money, from unlimited spending approval, eip7702, and so on.

Maybe it's time for any wallet creator to have built-in safety mechanism to let the user know what they're really doing. Some wallet out there just give abstract hex input data on tx preview and expect user magically know.