Solana Could Face Lawsuits After Hack

  • Lawyers from an international firm say that if the hack is found to have been due to a code error, developers and external service providers would be held legally accountable.
  • FTX CEO Sam Bankman-Fried believes that the massive theft of crypto assets from the network was not Solana’s fault.

After the recent massive hacking of its network, Solana could face legal action from the more than 8,000 affected customers, warned Dan Wyatt, a partner at international law firm RPC, in a blog post on its website.

According to the lawyer, both Solana software developers and their external service providers could be sued if it is proven that the emptying of the wallets was due to code errors or internal security flaws.

"If the hack resulted from defective coding, software or security failure, impacted customers could potentially pursue a claim against Solana’s developers or service providers," Wyatt said.
"The recent Tulip Trading case has left the door open for claims in the UK courts against developers who failed to take reasonable care not to harm user interests, such as by introducing defects that could leave them vulnerable to losses," it added.

He said that this same reasoning could be applied to the external service providers of the decentralized blockchain launched in 2020 in Switzerland.

A Claim Against Hackers?

The firm’s senior associate, Chris Whitehouse, said that Solana users affected by the hacks could also choose to file a claim against hackers who violated network security protocols.

Unknown hackers carrying over $5 million worth of cryptocurrencies can be tracked through the blockchain. If they could be identified there would be the possibility of freezing the stolen funds.

Another legal option would be for users to obtain disclosure warrants against the crypto platforms where these assets have been moving to try to find the hackers involved in the theft.

"Even if fault by the developers or service providers is ultimately established, users should still consider taking swift action now to recover their assets from the hackers in the first instance," Whitehouse said.

On the Flipside

  • Solana’s network has suffered in recent months all kinds of problems: attacks, congestion, stoppages, etc. which has decreased the performance of its blockchain.
  • However, following the collapse of the cryptocurrency market and despite losing ground after falling from the high of $160 in November, it has been recovering.

Why You Should Care

  • The Solana token (SOL), which is the 9th leading cryptocurrency by market capitalization, was trading around $44 on Thursday, gaining 6.66% in the last 24 hours.

FTX billionaire CEO Sam Bankman-Fried said that Solana is the “most underrated” token on the market. Despite the hack, Bankman-Fried remains confident in Solana, explaining that “This wasn’t a core blockchain problem, likely seems like one app someone built was buggy.”

You can read more about the Solana hack here:

Massive Solana Hack Drains $8M Across 8,000 Wallets

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Santiago is Venezuelan blockchain reporter specializing in economic and financial issues, with special emphasis on stablecoin trading as well as political and regulatory issues related to Latin America. Every day he reviews and analyzes movements in the crypto market to offer readers first-hand information that can help them make sound decisions in the exciting world of crypto.