The recent hack at the memecoin trading platform DEXX has left lingering doubts about the security of Solana wallets after more than 8,600 Solana addresses suffered combined losses of more than $30 million.

On November 16, 2024, hackers found a weakness in DEXX. This hack led to massive financial losses and has now shone a spotlight on Solana as an ecosystem. The blockchain has made a name for itself in decentralized finance and as an ecosystem for developers to create the likes of Phantom Wallet, Jupiter Exchange, Raydium Market Maker and more. NFT marketplaces, online casinos and a number of other businesses have chosen to work with Solana, and this is a real stick in the spokes of that progress.

While this is surely a PR hurdle for DEXX and Solana, retail investors continue to support SOL driving the coin’s price up 25%+ in the last three months. Further solidifying SOL’s future value potential, a survey conducted by Binance found that out of 470 users surveyed 45.11% felt SOL has a “very bullish” price prediction.

Details of the Breach

The hackers went after a private key vulnerability in DEXX’s system. Private keys are the best way to access crypto wallets, but they are a weakness in themselves and have become the primary target of this attack. Once the hackers had compromised the private keys, they could siphon funds into Solana wallets under their control.

At least 900 individual users suffered some form of loss from the breach. Most lost less than $10,000, but one unfortunate victim lost $1 million. The losses were first reported at $21 million, but the volatile nature of meme coin prices meant that number was even worse in the final reckoning.

DEXX made a bold public statement promising to freeze wallets and recover funds from the hackers. The platform also offered a bounty for the return of its funds, but so far none of its efforts have worked. DEXX continues to work with law enforcement and SlowMist to trace and recover funds and beef up its security protocols so this can’t happen again. But the longer time goes on, the less chance there is of recovering any of the stolen funds.

Implications for Solana Wallet Security

Solana has been in the security wars of late. In August, an exploit targeted 8000 Solana wallets, and hackers made off with $6 million in stolen funds. One of Solana’s main selling points is increased security. A Proof of History consensus that adds timestamping to the blockchain. That, combined with several other security measures, is meant to make Solana tamper-proof.

While SlowMist claimed Solana wallets have been increasingly targeted due to the rising popularity of the blockchain, this private key exploit is a critical flaw that has now been exposed. Solana must deal with this because other hackers will come sniffing around soon.

A Big Year for Blockchain Hackers

In November alone, hackers stole $71 million, according to Immunifi, and the annual losses now hover around the $1.5 billion mark. Phishing scams and rug pulls are up this year, with $20.2 million stolen from just 12,000 wallets in October.

Solana is not the only blockchain to suffer with security issues and finding exploits in the system is big business for the hackers. This year, $1.34 billion was taken across 47 incidents linked to North Korean-affiliated hacking groups. That’s two-thirds of the total crypto hacks in 2024, and the group made off with $305 million in one hit from the Japanese exchange DMM Bitcoin, which closed shortly after. WazirX lost $230 million in Ethereum, Polygon, and Shiba Inu after a hacker found a vulnerability in the multi-signature wallets in India.

Beating the Hackers

Solana isn’t the only one who constantly needs to patrol for weaknesses and vulnerabilities. This is the next frontier between hackers and cybersecurity specialists, and the industry has to evolve and fight these hackers more effectively.

The DEXX hack was another black eye for an industry that prides itself on enhanced security and a trustless environment where these hacks shouldn’t happen. They undermine the whole narrative of secure blockchain living, and Solana and the industry as a whole are feeling the effects of that right now.