The Sandbox Reportedly Hacked as Billions of SAND Tokens Minted

The Sandbox appears to be dealing with a serious security incident involving the unauthorised creation of huge quantities of SAND tokens. Initial reports spoke of more than 500 million new tokens, but blockchain security firm PeckShield now reports that two addresses have together minted around 14.9 billion SAND. South Korean trading platforms are meanwhile taking precautionary measures.

Billions of new SAND appear on blockchain

The incident came to light on 22 August after unusual minting transactions were flagged. According to initial on-chain data, a possible attacker holds rights that allow new SAND tokens to be created.

One of the addresses involved holds 250 million SAND alone, according to Etherscan. At the time of the screenshot, these tokens were worth approximately $12.05 million at a price of around $0.0482.

The scale appears to be far larger, however. PeckShield reports that roughly 14.9 billion SAND has been minted across two addresses combined. That figure is well above the initial reports of more than 500 million tokens.

It is worth noting that The Sandbox had not, at the time of writing, given a full explanation of the cause and scale of the incident. As a result, it has not yet been definitively established how many of the minted tokens are actually controlled by an attacker, or what could be done with them.

Upbit warns and Bithumb suspends transfers

The events are meanwhile prompting action at major South Korean crypto exchanges. Upbit has placed SAND under a trading caution after the platform detected signs of a possible security problem. The exchange has also warned of heightened price volatility.

Bithumb has gone a step further and temporarily suspended deposits and withdrawals of SAND. The move is designed to limit the risks around the suddenly created tokens while it remains unclear exactly what is going on.

The incident could have major consequences if it emerges that an unauthorised party can genuinely create billions of freely tradable SAND. New tokens increase the available supply and could, if sold, put severe downward pressure on the price.

The Sandbox is a well-known metaverse project and part of Animoca Brands. The project raised $93 million in an investment round in 2021.

For SAND holders, the focus now is on clarity from the project itself. As long as The Sandbox does not confirm how the minting rights were obtained, how many tokens are affected and what measures are being taken, the full impact of the incident remains uncertain.