Virtuals Protocol (VIRTUAL) a top performer this week, navigating the artificial intelligence (AI) crypto boom, is now crashing. The sudden bearish reversal happens as a blockchain security researcher exposed a reported security vulnerability that the Virtuals team ignored.
Namely, jinu (@lj1nu) went to X between January 2 and 3 to publicly report a security vulnerability he found while “quickly looking” at the Virtuals Protocol code. The public report, however, was only necessary after jinu’s private reporting being ignored by the team in their Discord server.
“They [Virtuals] seem to have been audited, but when I contacted them, the team replied that they were not running a bug bounty. And they closed the discord channel I created to report the vulnerability.”
Picks for you
This is not ideal nor the open-source software standard way to deal with a reported threat, raising alerts and concerns. “I’m surprised that a project as big and hot as @virtuals_io doesn’t care about security,” concluded the researcher.
Leading AI crypto Virtuals Protocol’s security vulnerability explained
Interestingly, another security expert, 33Audits (@solidityauditor) revealed that he and “a few others” tried to report the same issue before, just to get “booted” from both the Discord and Telegram official servers.
tried to report this along with a few others and they booted me from the discord and stopped answering on tg. they don’t give af
— 33Audits (@solidityauditor) January 3, 2025
Yet, in a follow-up comment, jinu explained that Virtuals team quickly fixed the reported security vulnerability after his post’s success. The expert shared the now repaired source code and also the new contract address, now allegedly secured. “They patched it very quickly,” he said.
In summary, the vulnerability allowed attackers to predict and create a Uniswap V2 token pair before Virtuals did. This could prevent the protocol from properly launching new tokens.
If someone else creates the pair first, Virtuals can’t proceed with the launch after reaching a certain price-threshold in the platform. Essentially, the token creation uses a predictable method, allowing attackers to act first.
Virtuals Protocol (VIRTUAL) price crash
As of this writing, VIRTUAL is trading at $4.29, crashing 7.19% in the last 24 hours. The token traded as low as $4.10 while the problem remained, now slightly recovering after the apparent fix.
According to a Finbold report Yesterday, the AI crypto scene is experiencing a massive surge, surpassing the $10 billion total market cap. In the last seven days, VIRTUAL accumulates 30% gains, but investors and traders are now dealing with fear, uncertainty, and doubt (FUD), regarding the recent events.
This issue could have affected users by delaying token releases, investors by risking token value, and developers by damaging trust. While it is already fixed, the team behavior damaged the market’s trust, directly affecting its price performance.
Featured image from Shutterstock
