Tag: Negative

On-chain investigator ZachXBT flagged a suspected drain tied to Polymarket on Friday, reporting that over $520,000 had been taken from addresses linked to the prediction market’s Polygon infrastructure.

Polymarket Acknowledges Breach

Polymarket developers later acknowledged the incident, stating that it involved an internal rewards wallet and did not affect user funds or market outcomes.

“Findings point to a private key compromise of a wallet used for internal top-up operations, not contracts or core infrastructure,” the Polymarket Developers account tweeted.

Over an hour after the initial disclosure, the on-chain analytics platform Bubblemaps estimated the loss at approximately $700,000. Bubblemaps indicated that the funds were split across 16 addresses and routed through centralized exchanges and other services.

Prediction markets on Polymarket utilize contracts that record bets and pay winners after an external service confirms the result. The wallet involved in Friday’s incident appears to have been used for rewards payments, separate from the contracts that handle user funds and market outcomes.

Experts Weigh In

Andy Yajin Zhou, associate professor at the Chinese University of Hong Kong and co-founder of on-chain security firm BlockSec, told Decrypt that their initial review aligned with the Polymarket developers’ account, suggesting a private key compromise rather than a flaw in the platform’s core systems.

“Based on our initial analysis, this does not appear to be a flaw in the adapter contract logic or prediction market infrastructure itself,” Zhou said. “At this stage, we have not identified evidence suggesting a protocol-level exploit, oracle manipulation, or a generalized vulnerability in adapter-based market infrastructure.”

Zhou explained that incidents like this highlight operational security risks, including key management, access control, signing policies, monitoring, and other safeguards surrounding wallets used for routine operations.

Blockchain security firm Cyvers reached a similar conclusion, stating that the incident appeared to affect operational or admin wallets instead of Polymarket’s core contracts or its system used for settling markets, pointing to a broader industry risk around privileged wallets.

“Even when prediction market protocols are secure at the smart contract level, privileged adapter or admin wallets remain a critical attack surface if key management or operational security is compromised,” Hakan Unal, senior security operation lead at Cyvers, told Decrypt.

Dan Dadybayo, strategy lead at crypto infrastructure developer Horizontal Systems, told Decrypt that the incident fits a broader shift in how attackers are targeting crypto projects.

“This increasingly looks like a key management failure rather than a smart contract exploit,” Dadybayo said. “The interesting shift across crypto is that attackers are no longer primarily breaking protocols. They’re targeting the operational layers around them: admin wallets, permissions, and infrastructure.”

Decrypt has reached out to Polymarket for comment and will update this article should they respond. This is a developing story.

Malware Campaign Targets Software Supply Chains

A malware campaign dubbed “Shai-Hulud” is spreading through the software pipelines used by developers to build and distribute code, raising concerns about the reliance on automated systems with minimal human oversight.

Researchers have linked the Shai-Hulud malware campaign to approximately 320 package entries across Node Package Manager (NPM) and PyPI, two major online repositories used by developers to download and share JavaScript and Python software packages. These affected packages collectively account for over 518 million monthly downloads.

“Shai-Hulud is significant because it exposes a problem we cannot fully patch away: modern software is built by running other people’s code,” said Jeff Williams, CTO of the California-based security firm Contrast Security. “Developers do not merely ‘download’ libraries. They install them, build with them, test with them, deploy with them, and eventually execute them. And if you run a malicious library, it can do almost anything you can do.”

Williams added that advances in artificial intelligence complicate the threat, comparing Shai-Hulud to making a computer a double-agent.

“The scary part is the leverage. If an attacker compromises one obscure package, they do not just get that package,” Williams said. “They get a path into every downstream project that trusts it. Then they can steal more tokens, publish more poisoned packages, and repeat the cycle. The software supply chain is not a chain anymore—it’s a propagation network.”

Recent Incidents and Impact

Earlier this month, Microsoft Threat Intelligence disclosed that attackers inserted malicious code into a Mistral AI software package distributed through PyPI. The malware downloaded an additional file designed to resemble Hugging Face’s widely used Transformers library to blend into machine-learning development environments. Mistral later stated that an affected developer device was involved but that there was “no indication that Mistral infrastructure was compromised.”

Two days later, OpenAI confirmed that malware tied to the same campaign infected two employee devices, giving attackers access to a limited number of internal code repositories. The company found no evidence that customer data, production systems, or intellectual property were compromised.

Named after the giant sandworms in Frank Herbert’s “Dune,” researchers traced earlier versions of the malware back to September 2023 and cybercriminals known as TeamPCP. However, the campaign gained wider attention after a major May 11 attack targeting TanStack, a widely used open-source JavaScript framework used in web and cloud applications.

Growing Threat to Software Supply Chains

Shai-Hulud is part of a growing trend of supply-chain attacks where hackers compromise trusted software tools or services used by other companies. Instead of directly targeting victims, attackers use these trusted systems to spread malicious code or gain access to developer environments.

Researchers say the attacks poison shared build caches, causing future software releases to quietly incorporate the malicious code. To a developer downloading the packages, everything appears normal because the software comes from trusted sources, carries valid signatures, and passes security checks. This is what makes the attack so concerning.

On Sunday, cybersecurity firm OX Security reported that new malicious packages mimicking the original malware were already stealing cloud and crypto wallet credentials, SSH keys, and environment variables. Some variants also attempted to turn infected machines into DDoS botnets.

“One incriminating evidence that this is a different actor from TeamPCP is that the Shai-Hulud malware code is an almost exact copy of the leaked source code, with no obfuscation techniques, which make the final version visually different from the original,” OX Security wrote. “In our breakdown, we show the side by side comparison of the chalk-template Shai-Hulud version with the original source code leak, showing that they are the same.”

Broader Implications

The emergence of Shai-Hulud coincides with the increasing reliance of modern software developers on automated platforms like GitHub Actions. Simultaneously, supply-chain attacks targeting open-source infrastructure have become more common as attackers focus on developer tooling and automated publishing systems rather than end-user systems directly.

“[Shai-Hulud] is a reminder that [systems, applications, and products] attack surface now extends well beyond traditional application layers and into the open-source packages that power modern development and deployment workflows,” said Joris Van De Vis, Director of Security Research at the Netherlands-based cybersecurity firm SecurityBridge.

On Tuesday, GitHub announced it was investigating unauthorized access to its internal repositories after TeamPCP claimed responsibility for stealing roughly 4,000 private repos and offering the data for sale on a cybercrime forum for at least $50,000.

According to Van De Vis, Shai-Hulud also demonstrates how attacks targeting trusted software automation can quickly spread from developer tools into enterprise systems that companies rely on for critical operations.

“When trusted npm dependencies can be weaponized to steal credentials from [Cloud Application Programming] and [Multi-Target Application] environments, the risk is no longer just a developer laptop issue, it becomes a direct path toward productive SAP systems, which is why organizations need tighter dependency controls, exact version pinning, and stronger publishing safeguards,” Van De Vis said.

GitHub Repositories Breached, Prompting Security Concerns

Hackers gained access to GitHub’s internal repositories earlier today by exploiting an employee’s computer through a compromised VS Code extension.

Following the incident, reports surfaced that a threat actor using the alias TeamPCP is allegedly selling approximately 4,000 of GitHub’s private repositories on a cybercriminal forum, with a minimum asking price of $50,000.

GitHub confirmed the breach via posts on its X account, detailing the information available at the time. According to the platform, the attacker gained access to its internal repository through a malicious VS Code extension loaded onto an employee’s device.

GitHub stated that it promptly removed the malicious software from the infected machine upon discovering the attack. Crucially, the company emphasized that there is currently no evidence that customer data held outside its internal systems, including individual users’ enterprises, organizations, or repositories, was accessed.

The hosting service also confirmed it quickly rotated credentials, prioritizing the most critical secrets. It will also examine logs to identify any additional activity and will provide further details after the investigation concludes.

Alleged Sale of Stolen Data

Meanwhile, French researcher Sébastien Latombe highlighted a listing on a criminal message board by the threat actor TeamPCP, claiming responsibility for the hack. The listing mentions repositories related to GitHub Actions, GitHub Enterprise, GitHub Copilot, Azure, CodeQL, billing, and authentication services.

TeamPCP is reportedly seeking a single buyer for the stolen data, rather than a ransom from GitHub, with a minimum asking price of $50,000.

However, neither GitHub nor Microsoft has officially confirmed the content of the forum listing. Claims made on cybercriminal sites should be treated with caution, as the data provided may be outdated or exaggerated to inflate its perceived value.

Industry Response and Broader Security Concerns

The online reaction to the breach was swift. Binance co-founder Changpeng Zhao (CZ) urged crypto developers to review and change their API keys if they are present in their code, even in private repositories.

Responses highlighted a widespread industry problem. Topaz DEX founder Aaron Shames called it “bad practice to have API keys in any repo, private or not,” while acknowledging the warning.

Others pointed out that managing hundreds of keys across projects is not a simple task for developers.

Digital artist Tuteth_ wrote, “This entire practice of key storage needs an update.”

Security commentator Dhanush Nehru added, “No one knows what all permissions each VS Code extension owns. The cybersecurity threat landscape is scary.”

The timing of this incident has heightened existing concerns about crypto security, following multiple high-profile hacks this month, including an attack on Echo Protocol, where hackers minted $76.7 million worth of eBTC.

That incident followed multimillion-dollar attacks on THORChain and the Verus-Ethereum Bridge.

These events have reignited discussions about code verification and software supply chain vulnerabilities, with Vitalik Buterin suggesting that formal verification, aided by AI, can enhance software security by mathematically proving its behavior.