Financial app developer Telcoin has successfully recovered all user balances, just two weeks after an exploit resulted in the loss of $1.2 million in user funds. In correspondence with CryptoNews, Telcoin confirmed the full restoration of user balances, the rectification of the security vulnerability, and the completion of an external audit on its contracts.
In their official statement, Telcoin disclosed that the restoration of user balances was made possible by utilizing funds from their own treasury. Simultaneously, the company remains committed to collaborating with law enforcement agencies and blockchain security experts to locate and retrieve the stolen assets.
Paul Neuner, Telcoin’s founder and CEO, expressed his satisfaction with the swift decision to proactively restore affected user wallets from the company’s treasury, praising the team for accomplishing this task in record time.
The initial exploit took place in late December, stemming from a wallet implementation error on the Polygon network that caused user balances to decrease within the Telcoin mobile app.
The root of the problem lay in a flawed interaction between Telcoin’s digital wallet and a proxy contract. This erroneous interaction caused the proxy to carry out certain storage functions incorrectly, ultimately enabling the exploiter to withdraw funds from user accounts, as explained by Neuner.
Nevertheless, Neuner emphasized that despite this incident, using a proxy still represents a “security best practice.” He emphasized that they have since updated, fortified, and subjected their restored implementation to external audits.
Furthermore, it’s noteworthy that no administrative keys were compromised during the exploit. Neuner affirmed that the Telcoin ecosystem remained unaffected by the incident.
Announcement Sees Rise in Telcoin
The initial exploit triggered widespread panic among Telcoin holders, resulting in a brief 65% decline in the price of Telcoin ($TEL).
However, following the company’s official announcement, deposits experienced a significant surge on the first day after the restoration of Telcoin App’s services.
“In the initial day after restoring Telcoin App services, we observed a remarkable 400% increase in deposits compared to the previous month, with a deposit-to-withdrawal ratio of $3.60 deposited for every $1 withdrawn,” stated the company.
As of the current time, the company’s token is trading at $0.001364, according to CoinMarketCap.
In addition to this, the company extended its December Holiday Promo through the end of January as a token of appreciation for the support demonstrated by its user community. The company’s blog post noted that users participating in the extended campaign, including those who made a USDC deposit with Transak after the resumption of Telcoin App services, would receive a TEL airdrop in February.
