Bittensor suspends network operations following 8 million theft resulting from private key compromise

Blockchain startup Bittensor has paused its network temporarily due to a breach in the private key, leading to a 16% drop in the network’s token value.
Bittensor, which is a decentralized protocol for machine learning, seems to have been targeted by hackers, who attacked multiple wallets in the network, resulting in estimated losses of $8 million.
In a Telegram post on Jul. 2, blockchain investigator ZachXBT disclosed that hackers had withdrawn more than 30,000 Bittensor TAO tokens, valued at about $8 million at the time. Bittensor acknowledged the attack in a Discord channel, leading to a temporary halt in the network.
At the time of this report, the exact cause of the breach is still unclear, although ZachXBT suggested that it could be due to a “private key leakage.” Following this news, the TAO token plummeted by almost 16% to $227 before recovering to $238, according to CoinMarketCap data.
Established in 2019 by AI researchers Ala Shaabana and Jacob Steeves, Bittensor initially functioned as a Polkadot parachain but shifted to its own layer-1 chain in March 2023. Reports suggest that Polychain Capital supported Bittensor in 2019 and held approximately $200 million in its tokens as of April.