Cryptocurrency project Telcoin has confirmed that a recent security breach impacted its mobile application, leading to a drop of more than 35% in the value of its native TEL coin within the past day.
The incident was first reported on Dec. 25, and the company promptly halted its mobile application usage pending an investigation.
In an update released on Dec. 26, Telcoin mentioned that they had implemented a fix for the issue. The problem was traced back to the proxy implementation of the wallet on the Polygon network, which mainly affected wallets that were yet to initiate any transactions.
Meanwhile, the platform did not disclose specifics of the exploit or the amount lost.
Blockchain security firm CertiK estimated that the project was exploited for around $1.25 million, adding that:
“The exploiter took advantage of un-initialized proxy contracts and initialized them with vulnerable implementations to transfer Telcoins. This contract was not in the scope of the audit conducted by CertiK”
Telcoin, however, has assured its users that all wallets affected by the breach will be restored to their previous balances before access to the mobile application is reinstated. The project did not provide information about when this access would be returned but said the process “may take some time.”
“No keys, backend systems, or user data were breached. We will provide another update soon and appreciate everyone’s patience and support,” Telcoin added.
Meanwhile, data from CryptoSlate show that these developments negatively impacted Telcoin’s TEL token, which fell by 37% in the last 24 hours to $0.00145 as of press time. The incident also spiked the asset’s trading volume by more than 1400% during the reporting period to $18.8 million.
Following the security breach, the project’s market capitalization fell approximately $60 million, dropping to $105 million from its previous $166.78 million.
Telcoin was founded in 2017 and leverages the Polygon blockchain to offer affordable decentralized financial services to mobile phone users globally.