Ignored AI Crypto Flaw Takes Down Virtuals Protocol by 9,5% and Generates FUD

• FUD mounts after security flaw ignored
• Virtuals Protocol Plunges 9,5% in AI Crypto
• Importance of agile reviews in decentralized projects

The AI-focused cryptocurrency market has seen a significant shake-up, with Virtuals Protocol suffering a 9,5% drop after a security flaw was revealed. Social media posts attributed to a researcher known for analyzing contracts suggested that the creation of a specific token would allow the formation of pairs in a decentralized exchange protocol to be predicted before the official project itself.

I took a quick look at the code and found the vulnerability in @virtuals_io

They seem to have been audited, but when I contacted them, the team replied that they were not running a bug bounty. And they closed the discord channel I created to report the vulnerability. pic.twitter.com/W39eP6hLIX

— jinu (@lj1nu) January 3, 2025

According to reports, this vulnerability involved the token initialization function, which created pairs without checking whether something similar already existed. This oversight could result in premature pair creation, subsequently blocking the creation of a new asset by Virtuals Protocol. Experts have confirmed that this vulnerability directly affects the way the platform manages its issuance processes, which could harm users and investors.

The Virtuals Protocol's response was initially questioned by the community, as there were reports of a delay in acknowledging the issue. In public posts, the researcher behind the discovery claimed that he had tried to communicate with the project team, but had not received an immediate response. He also mentioned the use of a testing tool to prove the risk, demonstrating that attackers could exploit the flaw in a predictable manner.

Only after the issue was publicly exposed did the Virtuals Protocol team release a patch to mitigate the issue. Although the fix was considered effective, investor confidence was impacted by the way the situation was handled. A statement by one of the participants, who said he was surprised to see a project of the platform’s size ignore a vulnerability, reinforced the climate of uncertainty.

Amid this context, the token’s price plummeted from $4,73 to a low of around $4,10, recovering slightly to $4,25. Cryptocurrency analysts believe that the turbulence may, for some time, affect the risk perception associated with AI Crypto projects. However, with the correction implemented and the AI ​​agent segment expanding, Virtuals Protocol seeks to regain credibility among enthusiasts and consolidate its place in a competitive scenario.