Blink Wallet Halts Services After Custodial Accounts Compromised

Blink, a Bitcoin Lightning Network payments app, paused all services on September 19 after an attacker drained funds from a limited number of custodial accounts. The incident was logged as critical on the company's status page and marked resolved the following morning. Blink serves as a Bitcoin wallet for circular-economy projects in El Salvador, Guatemala, Honduras, and Kenya. The breach specifically affected custodial accounts, where Blink holds private keys for users, while non-custodial users managing their own keys through Blink's Spark protocol were not impacted. Blink reported that a few dozen custodial accounts were compromised, but a large majority of funds remain secure. The company attributed the limited damage to a multisig cold-storage system combined with smaller hot-wallet components. Following the incident, Blink paused the app, deployed an emergency patch, and restored services by Saturday evening. The company confirmed that all affected accounts would be reimbursed and a full post-mortem would follow. The exact attack vector has not been disclosed. This breach occurs during a challenging time for Lightning Network applications, with other infrastructure facing vulnerabilities and bugs, prompting Blink to reduce custodial services in some areas and encourage users to transition to its non-custodial Spark wallet.

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