Loopring (CRYPTO:LRC), a prominent Ethereum-based (CRYPTO:ETH) ZK-rollup protocol, suffered a significant security breach resulting in a $5 million loss due to exploitation of its Guardian wallet recovery service.

The hacker bypassed Loopring's two-factor authentication (2FA) process, initiating unauthorised wallet recoveries and asset transfers.

Loopring has suspended Guardian and 2FA operations, collaborating with security teams and law enforcement to address the breach.

This incident underscores broader concerns about smart wallet security and highlights the need for caution in the crypto ecosystem.