Loopring, a prominent Ethereum zero-knowledge roll-up protocol, has fallen victim to a significant security vulnerability attack on its smart wallets. The attack, which was linked to the Loopring Official Guardian, has resulted in the loss of approximately $5 million worth of assets. The project is currently collaborating with security experts and law enforcement agencies to investigate the breach and track down the perpetrators.

The attacker exploited the vulnerabilities of the Official Guardian, targeting a subset of wallets and impersonating wallet owners to initiate unauthorized recoveries. By bypassing Loopring's authorized Guardian services, the malicious actor was able to siphon substantial assets from several wallets. Two malicious wallets have been identified and publicly shared by Loopring and blockchain audit firm Cyvers Alert.

Onchain data from Etherscan revealed that one of the hacker's wallets seized approximately $5 million worth of assets from the compromised wallets. However, not all wallets were exposed, as those employing multiple guardians or alternative third-party guardians were not affected by the recent exploit. Loopring has temporarily suspended all Guardian-related and 2FA-related operations to protect users and prevent further compromise.

The investigation is ongoing, with Loopring working closely with Mist security experts and law enforcement agencies to determine how their two-factor authentication service was compromised. The network encourages anyone with additional information about the exploit to come forward and commits to providing updates as the investigation progresses. Loopring's native token, LRC, has experienced a slight reaction to the news, currently trading at $0.2199, reflecting a 2.7% decrease in the past 24 hours and an 18% decrease over the past 7 days.

In conclusion, the security vulnerability attack on Loopring's smart wallets has resulted in a significant loss of assets, highlighting the importance of robust security measures in the cryptocurrency sector. Loopring's swift response and collaboration with security experts and law enforcement agencies demonstrate their commitment to protecting users and preventing future breaches.