Virtuals Protocol Faces Backlash After Security Flaw and Price Drop

Virtuals Protocol (VIRTUAL), a leading AI crypto token, faced a sharp decline after a critical security vulnerability was publicly disclosed by blockchain researcher known as "jinu".

Jinu revealed that his private warnings to the Virtuals team were ignored, prompting him to expose the issue on X. The vulnerability allowed attackers to create Uniswap V2 token pairs ahead of Virtuals, potentially disrupting the platform’s token launches.

The team initially dismissed the report, closing communication channels created for the disclosure. Another expert, “33Audits”, confirmed similar experiences.

Following public pressure, the Virtuals team quickly patched the issue, releasing updated code and a new contract address.

Despite the fix, the incident caused VIRTUAL’s price to drop 7.19% in 24 hours, falling to $4.10 before recovering to $4.29.

This setback comes during a broader AI crypto boom, with the sector surpassing a $10 billion market cap. While the issue has been resolved, the team’s handling of the situation has raised concerns about transparency and security, potentially undermining investor trust.