Date: June 10, 2024
By: Gabrielle Rodriguez
In a recent turn of events, Sam Kazemian, the founder of the decentralized finance protocol Frax Finance, has asserted that the team has strong leads on the identity of the hacker who breached their X account. This incident has raised concerns about internal security within social media platforms and their vulnerability to insider threats.
Inside Job Allegations
Kazemian took to Telegram on June 3 to share the team’s findings, revealing that the hack of Frax Finance’s X account was likely an inside job. He accused a “serial scammer” known to blockchain investigator ZachXBT. Kazemian emphasized that this breach was not due to a security lapse or phishing attack aimed at the Frax team but rather a compromise within X’s internal operations.
“We will try our best to bring that person to justice. And again to be clear to anyone reading this: this wasn’t a security issue and no one on the team was phished or anything. This was an inside job.”
— Sam Kazemian
The hack occurred in early June and involved either internal collusion or social engineering tactics within X. Kazemian confirmed on his X account that there were no issues like password resets or breaches within Frax Finance itself.
“If anyone has a direct line to X account/customer service please DM me, @fraxfinance X account is compromised and appears to be inside job or social engineering within X since no password reset or other issues within Frax itself. Please stay safe and don’t click any X links!”
— Sam Kazemian (@samkazemian)
Currently, the Frax Finance X account is active but devoid of new posts following the incident.
Broader Implications and Similar Incidents
This breach is part of a troubling trend where crypto projects report insider involvement in hacks, particularly within social media platforms. Neither X nor its chief executive Elon Musk has commented on the Frax Finance hack.
In a similar incident in late May, a crypto trader known as GCR had his X account compromised through bribery, leading to an ORDI pump-and-dump scheme. ZachXBT suggested that developers of the Solana-based memecoin CAT might have been behind that attack. The connection between the two hacks remains unconfirmed, but the pattern of insider threats within X is becoming more evident.
Moving Forward
Frax Finance’s determination to pursue justice for this breach highlights the ongoing security challenges in the crypto space, especially regarding social media platforms. The industry continues to grapple with safeguarding accounts against sophisticated threats, including insider collusion and social engineering.
As the investigation unfolds, the crypto community and industry stakeholders will be watching closely for updates and potential measures to mitigate such risks in the future.
