Despite cryptocurrency markets maturing, the pandemic of exchange hacks has yet to be resolved. The seventh major cryptocurrency theft in 2018 was a hack on Bancor for $23.5 million that halted trading on July 9, 2018.
Another One: Bancor Loses 25k Ethereum
In a statement revealed July 9, Bancor experienced a security breach to the hot wallet used to update smart contracts on its exchange, resulting in a loss of approximately $23.5 million worth of cryptocurrency.
This morning (CEST) Bancor experienced a security breach. No user wallets were compromised. To complete the investigation, we have moved to maintenance and will be releasing a more detailed report shortly. We look forward to being back online as soon as possible.
— Bancor (@Bancor) July 9, 2018
The tweet reveals that Bancor halted trading on the exchange while it investigates the security issues. In the event, Bancor ensured that no users’ wallets have been directly compromised.
In a more detailed statement released hours later, Bancor outlined the extent of the theft – indicating that 24,984 ETH (~$12.5M), 229M NPXS (~$1M) and 3.2M BNT (~$10M) were stolen in total.
The wallet containing the stolen Ethereum has been tracked by Etherscan and can be viewed here. Bancor stated that they are working with separate exchanges to locate and recover the missing funds.
Centralized or Decentralized – All Hackable
Appearing in an interview with TechCrunch on July 6, Vitalik Buterin denounced centralized exchanges as having too much authority over cryptocurrency price manipulation. Stating that egregious listing fees and lack of transparency make centralized cryptocurrency exchanges susceptible to abuse of powers, Vitalik stood by his support for decentralized exchanges, such as Bancor.
However, it’s evident that regardless of the exchange’s network structure, both are equally susceptible to large-scale hacks. In 2018 alone, the global cryptocurrency sector has experienced seven, considerable thefts on exchanges and network protocols – yielding three times the total amount stolen in 2017.
On June 19, Korean cryptocurrency exchange Bithumb was hacked for 350 billion KRW (~$30 million) and was forced to suspend new user account registrations until the security breach was resolved.
In early June, 38,642 ETH (~$20 million) was stolen from insecure Ethereum nodes over the course of three months before the issue was exposed.
Major thefts of cryptocurrency continue to plague the industry and pose an obstruction to global mass adoption. Bancor has yet to reveal further updates on its exchange hack.
Cover Photo by Grillot edouard on Unsplash