Billions of SAND Tokens Minted in Possible Hack of The Sandbox

The Sandbox appears to have been hit by a major security incident in which enormous amounts of SAND tokens were created without authorisation. Blockchain security firm PeckShield reports that two addresses together minted approximately 14.9 billion SAND. South Korean trading platforms are taking precautionary measures in the meantime. The Sandbox has not yet provided a full statement at the time of writing.

SAND is available at OKX and Bybit.

In brief:

• PeckShield reports that two addresses together minted around 14.9 billion SAND, significantly more than the initial estimates of over 500 million tokens.
• Upbit has placed SAND under a trading warning, while Bithumb has temporarily suspended deposits and withdrawals.
• The Sandbox has not yet confirmed how the minting rights were obtained or what measures are being taken.

Billions of tokens appear on the blockchain

The incident came to light on 22 August after unusual minting transactions were detected. According to Etherscan, one of the addresses involved holds 250 million SAND alone, worth around $12.05 million at a price of approximately $0.0482.

PeckShield states that the actual scale is much larger. According to the security firm, around 14.9 billion SAND were created across two addresses combined.

Who is behind the minting transactions and how the minting rights were obtained remains unclear for now. The Sandbox has not yet commented on the cause, the exact scale or the measures the project is taking.

South Korean exchanges intervene

Upbit has placed SAND under a trading warning after the platform saw signs of a possible security issue. The exchange warns users of increased price volatility. Bithumb goes one step further and has temporarily suspended deposits and withdrawals of SAND to limit risks while it remains unclear what exactly is going on.

The potential consequences are significant. Newly created supply sold on the market could put severe downward pressure on the price. The Sandbox is a well-known metaverse project and part of Animoca Brands, which raised $93 million in 2021 during an investment round.

As long as the project does not confirm how the minting rights were obtained, how many tokens are actually controlled by an unauthorised party, and what steps are being taken, the full impact of the incident remains uncertain.