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Frax Finance founder says inside work at X resulted in account hacking
Sam Kazemian, founder of Frax Finance, said that an inside job at X was responsible for the hacking of the project’s official account.
The breach, which occurred on June 1, resulted in the decentralized stablecoin protocol behind FRAX USD losing access to its X account.
Frax Finance Hack
In a June 3 Telegram post, Kazemian mentioned that the Frax Finance team is “reasonably confident” that it has identified the perpetrator, described as a “serial fraudster” known to blockchain investigator ZachXBT.
“We will do our best to bring that person to justice,” Kazemian said. He clarified that the breach was not due to security flaws or phishing attacks targeting the Frax Finance team. “It was an inside job,” she stressed.
The incident occurred on June 1, when the Frax Finance X account was compromised. In an attempt to regain control, Kazemian urgently contacted his followers on X, asking for assistance in contacting the platform’s customer service. “If anyone has a direct line to account X / customer service, DM me,” he posted in the aftermath of the hack.
X typically advises users to change their passwords when an account compromise is detected. However, Kazemian said the passwords were not tampered with and that there were no internal security issues within Frax Finance that could have led to the breach. Instead, she emphasized X’s potential social engineering and insider involvement.
Frax Finance account X remains active at the moment, but no new posts are visible after the hack. To date, neither X nor its CEO, Elon Musk, have made any official comments regarding the breach.
An X user commented on the situation, highlighting the need to improve cryptographic authentication capabilities on X to maintain its status as the “home for crypto.”
Internal tangents connected to the Pump and Dump system
This incident with Frax Finance is the latest in a series of hacks against crypto projects, which have reportedly been attributed to internal actions at X. In late May, a cryptocurrency trader known as GCR reported a similar compromise of his X account.
“2 months ago I was informed by someone affiliated with Twitter that bribes were being made to gain access to my account, and so I tightened security. But there can be no security if X employees accept money for administrative access.” GCR said so.
According to GCR, the attackers took control of his account through bribery and used it to promote a pump-and-dump scheme involving ORDI and LUNA2.
ZachXBT later suggested that the developers behind the Solana-based CAT meme coin may have been involved in that hack. However, it remains to be confirmed whether the same group is behind the attack on Frax Finance.