Ethereum Layer 2 Protocol Loopring Faces Security Breach in Smart Wallets

Ethereum Layer 2 protocol Loopring announced that some of its smart wallets have fallen victim to a sophisticated attack. The vulnerability primarily affected wallets utilizing Loopring's official Guardian feature, a critical component designed to enhance wallet security. The breach occurred when hackers initiated a recovery process, effectively impersonating legitimate wallet owners. By exploiting this vulnerability, the attackers were able to reset the ownership of the compromised wallets and withdraw assets, leading to substantial losses for the affected users. Ethereum Layer 2 Protocol Loopring's Guardian feature is intended to provide an additional layer of security by allowing trusted entities or individuals to assist in the recovery of a wallet in case of loss or theft of private keys. However, the attackers managed to circumvent these protective measures, raising concerns about the robustness of current security protocols within the Loopring ecosystem.