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Hackers Steal $23.5 Million From Decentralized Cryptocurrency Exchange Platform Bancor

Bancor, a decentralized cryptocurrency exchange project has become the latest victim of cryptocurrency hackers. The company announced on Monday (July 9, 2018) that it experienced a security breach forcing it to shut down its operations. Bancor was one of the high profile ICOs of 2017, raking in $153 million during its token sale event.

Details of the Hack

Issues began yesterday when the platform announced a security breach. A few hours later, Bancor released a follow-up statement revealing that suspected hackers had stolen $12.5 million in ETH. The hackers also took BNT and NPXS tokens to the combined tune of $11m making the total loss to be $23.5 million.

According to the Bancor, the breach came via an online wallet being used to effect upgrades to certain smart contracts. The hackers were able to gain control of the wallet using it to siphon the stolen coins.

The Bancor team also announced that they were able to freeze the stolen BNT tokens – BNT is the native token of the Bancor platform. However, there is no way to freeze the stolen ETH and NPXS. Thus, the company plans to work in tandem with other exchange platforms in tracing the stolen ETH and preventing the cybercriminals from liquidating them.

Effect on the Bancor Cryptocurrency Price

Since the news of the hack became public, BNT token price has taken a significant tumble. At the start of yesterday’s trading, the BNT price was $3.15. By the end of the day, the price fell to $2.50. The decline has continued into its second day, today (July 10, 2018), dropping to $2.45. BNT has lost more than 20 percent since the attack.

The theft is yet another snag in the Bancor project development roadmap. Despite its fundamental premise and the successful ICO, the project has many doubters. Bancor is a decentralized exchange platform that employs a fluctuating price system for selling virtual coins even when there is no demand.

In 2017, Kyle Samani of Multicoin Capital said that Bancor didn’t provide any utility for the market. According to him, if exchanges decline to list any token, it is because that token isn’t good enough. He summarized his critique of the Bancor project thus:

For assets that actually have value, there will be a market. For assets that people don’t want to buy. Why should there be some pity-based programmatic market maker to provide liquidity? My inner capitalist is just dumbfounded by the concept of Bancor.

Will this latest hack adversely affect the prices of cryptocurrencies, especially Ether? Does this hack show that decentralized exchanges are just as vulnerable as their centralized counterparts? Keep the conversation going in the comment section below.

Image courtesy of Coinmarketcap.


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Bithumb Hacked – $30 Million in Cryptocurrency Stolen

In what has become a recurring theme in the digital currency industry, another cryptocurrency exchange platform has suffered a cyber intrusion. Suspected cybercriminals have hacked Bithumb, the South Korea-based exchange platform. This incident is the second of such attacks on a crypto exchange platform in South Korea, in as many weeks.

Details of the Bithumb Hack

Bithumb announced on Wednesday, 20 June 2018 that $30 million in cryptocurrency had been stolen from its coffers. As at the time of writing this article, the platform hasn’t specified the coins taken from the platform. However, the Sentinel Protocol, a team that focuses on online hacking and scams, said that Ripple (XRP) was among the coins stolen in the attack.

Announcing the hack, Bithumb said:

[Notice for the suspension of all deposit and withdrawal service]

We checked that some of [our] cryptocurrencies valued about $30,000,000 was stolen. Those stolen cryptocurrencies will be covered from Bithumb, and all of [our] assets are being transferred to [a] cold wallet.

Timeline of the Hack

The exact time the hack occurred is unknown at the moment. However, Bithumb reportedly moved a significant amount of Ether tokens to its offline wallet. This decision was due to some unusual activity regarding unauthorized access to its online wallets. The platform announced a server check on June 16 – lasting from only a few hours. However, the server check, which was to upgrade Bithumb’s security protocols, exceeded the scheduled few hours.

At precisely 00:53 UTC on June 20, 2018, Bithumb disabled deposits on the platform. The exchange service also began to move all coins stored in online wallets to more secure offline wallets to prevent more theft.

Bithumb plans to compensate users affected by the hack – they intend to cover all the losses. The platform is the sixth-largest in the world, with an average daily trading volume of almost $400 million, according to CoinMarketCap.

Second Exchange Hack in As Many Weeks

Less than two weeks ago, reports emerged of another hack on a South Korean-based cryptocurrency exchange platform. This time, it was Coinrail, a relatively smaller exchange service. The Coinrail hack coincided with a significant dip in the prices of cryptocurrencies, with Bitcoin losing $1,000 in a matter of hours. Thus, some experts declared that the hack was responsible for the decline.

However, the consensus among most experts is that the recent investigation by the U.S. government on suspected price manipulation activities in the market as well as the expiration of Cboe Bitcoin futures contracts was the likely cause of price reduction. Still, the frequency of cryptocurrency exchange hacks is something that will leave many traders worried.

Before the Bithumb hack, the market appeared to be recovering as it gained more than $12 billion in total market capitalization. There seemed to be signs of an emerging bull run as Bitcoin stayed above the $6,700 mark. However, since the news of the hack emerged, Bitcoin dropped $200, eroding all the gains of the past few days.

At the time of writing this report, most of the top 100 coins have declined in the past few hours, presumably due to the Bithumb hack.

Do you think the Bithumb hack will cause a massive dip in the prices of cryptocurrencies? Keep the conversation going in the comment section below.

Image courtesy of Twitter (@BithumbOfficial) and CoinMarketCap


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Notable Cryptocurrency Influencer Ian Balina Loses Over $1 Million To Hacker

Ian Balina, respected cryptocurrency investor and YouTube influencer have stated on his social media pages that he has been hacked over $1 Million. While Balina remains uncertain about the actual cause of the hack, he stated that the only clue he has was that he’s requested to change his college email after receiving notification that it was compromised.

“This is how I think I got hacked. My college email was listed as a recovery email to my Gmail. I remember getting an email about it being compromised, and tried to follow up with my college security to get it resolved, but wasn’t able to get it handled in fast manner and gave up on it thinking it was just an old email.”

Ian said he kept text versions of his private keys in his Evernote as encrypted text files with passwords, he however stated that his email and Evernote were hacked through the college email.

“I kept text versions of my private keys stored in my Evernote, as encrypted text files with passwords. I think they hacked my email using my college email, and then hacked my Evernote.”

While lamenting on the loss, Ian averred he was not moved, but he’s seeking to arrest the notorious hacker, and possibly bring him to book. In in this wise, he gave the details of the hacker seeking that the crypto community be on the look out to apprehend the evil perpetrator.

“Hey Crypto Family, I need you now more than ever. I had to end today’s live stream abruptly because I am being hacked. I need your help tracking the funds being sent off from these Ether wallet addresses.”

He gave two his addresses as:

As well, he highlighted three ETH Wallets belonging to the hacker:

Hacking is becoming a normal activity in the cryptocurrency space. Notable influencers have been hacked and stripped off their hard-earned wealth in the past. Exchange platforms and even cryptocurrency platforms were robbed as well. One very callous hacking that the cryptocurrency community will never forget is the Coincheck $530 million cryptocurrency heist, which encapsulated first enormous cryptocurrency hacking estimated to be $400 million in bitcoin stolen from Mt Gox in 2014.

Hacking is a punishable offense under the computer status, however, hackers remain unmoved despite stiff penalties placed on the illegal act.