Cybercurrency Hack Profitable For Culprits

By Brian Cullingworth, Last updated Jul 21, 2017

$32 million stolen in Ether hack

Virtual currency media outlets are reporting a massive hack that has reportedly succeeded in stealing the equivalent of $32 million worth of Ether crypto-currency.

Initial reports indicate that the cyber currency was stolen from customers at the online gambling website Edgeless Casino, the smart-contract platform Aeternity and the commerce platform Swarm City.

The reports indicate that the as yet unknown hackers exploited a critical security vulnerability in the wallet software to make off with 153,000 Ether, a cyber currency that has been growing in popularity and value.

Initial investigations show that the hackers started the raid on Tuesday this week in a total of three transactions that ended the following day.

Gavin Wood, the co-founder of the software supporting the Ether cyber currency, Ethereum, has told reporters that the theft is visible on Ether’s blockchain. He has posted that the vulnerability is found in Parity Wallet, software described as “the fastest and most secure way of interacting with the Ethereum network.”

The problem specifically impacts multi-signature wallets created in Parity meant to require electronic signatures from multiple parties in order to move money. Normal wallets are not at risk, according to developers.

Wood says a software update addressing the vulnerability will be released as soon as possible.

It could have been worse – the prompt action of “white hat” hackers in draining other wallets by exploiting the same vulnerability probably saved as much as 377,000 Ether, worth around $75 million.

The Ethers will be returned to the owners once the security threat has passed, the white hat group has announced.

Edgeless Casino recently raised around $2 million in an ICO (Initial Coin Offering), whilst Swarm City, a company that claims to offer the “first truly decentralized peer to peer sharing economy” raised funds by selling SWT tokens; and æternity blockchain is developing a new blockchain for scalable smart contracts – it raised almost 122,000 Ether in the first stage of its ICO recently.

Thus far Swarm City is the only company to acknowledge that it was hacked, advising that it lost 44,055 Ether ($9.15 million) from its Ethereum Parity wallet.

The hack has alarmed Ether users already concerned about security following the theft of Ethers worth $7,4 million earlier this week.

On Monday hackers raided CoinDash, an Israeli start-up crypto-currency trading platform right in the middle of its ICO fund raising initiative. The start-up was raising capital by selling its own digital tokens in exchange for the cryptocurrency Ethereum when an unknown hacker changed the address for sending investments to a fake one, diverting millions of dollars in contributions to the attacker.

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