While most of us were in celebration Christmas, others woke up to unexpected circumstances in the blockchain world.

Telcoin, the blockchain-based platform established in 2017 to extend financial services to the unbanked, encountered a significant setback as its native token, TEL, saw a 40% decline within the last 24 hours.

The drastic drop was attributed to an apparent error in the implementation of a Polygon wallet, resulting in diminished user balances on the Telcoin mobile application. The exploit was promptly identified by blockchain security firm Peckshield.

Messages circulating within Telcoin's community on the Discord online forum indicated that the exploit allowed an unauthorized party to drain over $1.2 million from affected accounts. Notably, these funds were taken from users who had never initiated transactions within the Telcoin application.

Telcoin, specializing in financial applications like trading and remittance tools on the Polygon blockchain for mobile users, took swift action by freezing its application during early Asian hours on Tuesday.

Developers clarified in an official post that the issue stemmed from the interaction between the application and the Polygon blockchain, assuring users that no private keys or sensitive data were compromised.

The team pinpointed the root cause as a flaw in the proxy implementation of the wallet on Polygon, particularly affecting wallets that had never initiated transactions.

A fix was promptly deployed to prevent further exploitation, and the developers expressed their commitment to restoring all affected wallets to their previous balances before resuming application services.

Telcoin acknowledged the security breach on Twitter, stating, "We are aware of the situation with the Telcoin App. We have temporarily frozen use of the app while we look into the issue, and will provide an update as soon as we can." Despite the lack of specific details about the exploit, reports confirmed the unauthorized withdrawal of millions of TEL tokens, causing a 40% drop in the token's price to $0.0013, according to CoinGecko data.

In response to the incident, Telcoin swiftly suspended the app's usage to conduct a thorough investigation. The project's team reassured users that they are actively working on resolving the issue and pledged to provide timely updates as the situation unfolds.

The company's commitment to restoring affected user balances offers a measure of assurance to the Telcoin community in the wake of this unforeseen security challenge.

This situation happening right at Christmas Eve, is what I like to call a Christmas Exploit. I hope you stay glued to this page for more updates and of course breaking news.