ZkSync hits new all-time low following $5M wallet hack

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Key Takeaways

- The zkSync (ZK) token fell to $0.04, its lowest price ever.

- The drop was triggered by the theft of $5 million worth of ZK tokens from an administrative wallet.

- Some of the stolen tokens were moved to exchanges, triggering panic and a price crash.

- The project team conducted an investigation and issued reassurances that user funds and the protocol remain secure.

- The hacker is being asked to contact the zkSync team to negotiate a return of funds and avoid legal consequences.

Hack triggers market panic

As reported by The Defiant, zkSync experienced a security breach on Tuesday. A wallet linked to the zkSync team was compromised, leading to the unauthorized minting and theft of ZK tokens.

The zkSync team confirmed that the incident did not affect user assets or core protocol functions, but a portion of the stolen tokens made it to exchanges, pushing the price of ZK down to $0.04. Earlier this month, the token had already dropped to $0.045, previously its all-time low.

Compromised airdrop wallet identified

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According to zkSync's official post on X, the compromised wallet was linked to the airdrop distribution system. The hacker executed the function sweepUnclaimed() to mint approximately 111 million unclaimed ZK tokens from airdrop contracts. This increased the total circulating supply by around 0.45%.

“This incident only affected airdrop distribution contracts. All tokens that could have been minted have now been minted. No further exploits using this method are possible,” the zkSync team stated.

They also assured users that the zkSync protocol, token contract, governance contracts, and restricted token minters were unaffected.

Following these clarifications, market panic subsided, and at the time of writing, ZK was trading just under $0.046, down 7% over the past 24 hours, with a market cap under $170 million.

ZK price dynamics for 24 hours. Source: CoinMarketCap

The team confirmed that most stolen tokens remain in the hacker’s possession and urged them to contact security@zksync.io to negotiate a resolution and avoid legal action.

As we wrote, ZKsync has prematurely ended its liquidity rewards program, Ignite, citing bearish market conditions and its transition toward an interconnected zero-knowledge ecosystem.

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