$500,000 Stolen via AI Router Vulnerability Targeting Crypto Wallets

A confirmed financial loss of $500,000 has been reported following a wallet drain linked to a vulnerability in AI routers. Security researcher Chaofan Shou identified 26 malicious Large Language Model (LLM) routers designed to intercept sensitive credentials. This breach occurs as the AI sector's market capitalization has remained range-bound between $16 billion and $19 billion over the last month. Additionally, reports of internal tensions or 'drama' surrounding the Bittensor project have emerged amid ongoing market volatility. Analysts warn that these security flaws, coupled with project-level instability, could undermine investor confidence in tokens like FET, TAO, and RNDR. The incident underscores the urgent need for caution when using automated AI agents for digital asset management.