Telcoin, a remittance platform, has suffered a security breach resulting in the loss of $1.3 million worth of cryptocurrency, according to cybersecurity firm PeckShield. The firm did not provide specific details about the theft. The news caused a significant drop in the value of Telcoin’s native TEL token, plummeting over 40%.
PolygonScan data traced the stolen assets to an Ethereum address known as 0x35d2775e5f95596509951b140d68fc5b9185ff98. On December 25, Telcoin suspended its mobile application after users reported issues. The company stated on Twitter that they were investigating the problems and had temporarily frozen usage.
As a result of the incident, users lost confidence and began withdrawing their assets in large quantities. CoinMarketCap data shows that TEL experienced a drastic 41% drop in value within 24 hours after the incident, which occurred during the usually slow trading period on Christmas day. Although TEL slightly recovered, it ultimately faced a 42% drop from its pre-exploit levels.
Currently, TEL is trading at around $0.001192, significantly lower than its 30-day high of over $0.002. Additionally, trading volume spiked by an astonishing 2775% to over $28 million, indicating that investors are rapidly exiting the troubled asset.
The theft has derailed Telcoin’s progress as a Singapore-based DeFi platform that aims to provide fast and affordable financial services to mobile phone users through blockchain technology. Telcoin’s goal is to collaborate with telecommunication companies to offer superior decentralized financial services to their 5 billion mobile subscribers. The recent exploit, however, hinders this progress, and Telcoin must address the issue transparently to restore user confidence.
Telcoin has recently launched the third version of its platform, introducing new user-owned products for remittances and a decentralized exchange. However, the $1.3 million exploit has significantly impacted the company and its users. Telcoin’s reputation lies in its ability to facilitate the transfer and conversion of telecom assets into cryptocurrency in a simple manner. It has formed partnerships with telecom providers and has experienced steady growth since its establishment in 2017.
To regain trust, Telcoin must provide a thorough explanation of the crypto theft and outline how it plans to prevent future breaches. The company’s response will likely determine whether TEL can recover or if it will face further decline.