As the world of digital currency continues to take shape, hackers are finding a way to manipulate systems and make away with as much funds as possible.
For this reason, it is anticipated that the future of cryptocurrency lies at the mercy of hackers and thus digital currency platforms together with stakeholders ought to take precaution to avoid being victims of lost funds.
In the recent past, cases of hackers stealing Bitcoin have hit the headlines on several occasions.
And now, Etherium has joined the league.
In one of the biggest Ether hacks, 150,000+ Ethers—equivalent to more than $30 million—were lost to hackers who exploited a vulnerability in a popular digital currency wallet, as reported by media outlets across the globe.
The information was available at the Etherium platform Etherscan.io.
For those unacquainted with Etherium, it’s key to note that it operates on the same underlying principle as Bitcoin.
However, there are some fundamental differences between the two.
The losses affected a start-up by the name of Parity, a smart contract coding company.
The flaw was caused by the existence of a bug in the multisig wallets.
Despite the flaw, reports suggest that losses of over 377,000 in Ether was prevented by a group of white hat hackers by sealing the loophole and further securing the systems.
If this was not the case, then perhaps the amount stolen from the hack would have soared even higher.
Gavin Wood, Parity Technologies’ founder, made a statement that the hack was caused by the compromise of three Ether wallets belonging to the startup.
He further urges users who have stored funds in multisig wallets to transfer them to a more secure address to prevent further losses.
The disturbing fact is that as time goes by more incidences of Ether hacks increase.
And for this reason, the parties involved ought to take extra precaution not to fall victim to rippers because they will seize every available opportunity to steal the available funds.
The startup considers the situation severe.
As such, they want all users with multi sig wallets to stop using them and transfer their funds to a relatively more secure Etherium wallet.
In a desperate bid not to lose more funds, Gavin says they have taken appropriate measures to ensure no more Ether funds are drained from wallets in their possession.
The original report conducted by Coindesk indicates that the three compromised wallets were of Swarm City, æternity, and Edgeless Casino.
The three were ICO projects built on Etherium, according to the same report.
Despite this, another hack facilitated on Coindash during its recent ICO.
That attack resulted in the loss of nearly $10 million.
So now, it is up to all parties with stakes in the digital currency scene to learn from the mistakes of others and take preventative measures to make sure another disaster will not strike them next.
In the case of Coindash, the website was infiltrated by attackers who changed the original Etherium address and replaced it with their own.
Consequently, all users who were contributing their funds to the ICO sent the money to the wrong address.
At the time of the hack, the number of Ether stolen was nearly $10 million.
After that, the company reached out to its members and stakeholders and informed them of the situation.
Contributors were urged to halt sending their Ether funds to any address for the time being, at least until the address was removed and replaced with the correct one.
Reports say that slightly more than 44,000 Ether were stolen from the e-commerce platform Swarm City, along with 82,000 Ethers from æternity and the rest from Edgeless Casino.
As a result, the hack triggered a fall in the price of Ether from 235USD to a mere 196.
After the hack had transpired, a series of events followed.
Matthew Carano, Swarm City’s communication officer, stated that their first step was to notify the Etherium Foundation as well as other developer groups.
Afterward, the team was able to determine that indeed a team of hackers had exploited a flaw in the Parity multisig.
After this was discovered and news sent to the public, the price of Bitcoin dropped by nearly 40USD.
Several measures haves to be put in place, according to Webroot threat researcher Tyler Moffitt.
As reported by CNBC, Moffitt advises users not to leave their funds on currency exchange platforms, as the funds are in the hands of a third party.
But rather, he recommends users put their funds in their private wallets, which tend to be more secure.
As such, if you need to use them on a third party platform, then only do so when at the time of need.
For clarification purposes, one should send the funds for a short period; after the transaction is completed, they should withdraw them with immediate effect for financial safety.
Just like the banking industry which has suffered losses accumulating to billions of dollars over the years, one can note that the same is likely to transpire in the case of digital currency as it is taking shape across the world.
Quite a bit of security enhancements need to be made in the cryptocurrency sector, especially with exchange platforms and in ICOs.
Users too are advised to follow the necessary measures to ensure safe security the funds in their respective wallets.