Cryptocurrency trading app Taylor suffered a catastrophic hack on May 22 that resulted in the loss of over 2,500 ETH, valued at $1.5 million. In addition, the trading platform lost 7% of the total TAY token supply, potentially crippling the development of the trading software.
The hack was announced via a Medium blog post published on May 21, in which the Taylor team stated that the hack was discovered on the morning of May 22:
“Today we arrived at the office and found out that we’ve been hacked and all of our funds have been stolen. Not only the balance in ETH (2,578.98 ETH), but also the TAY tokens from the Team and Bounty pools.”
According to the official statement, the only tokens that remain in the Taylor fund are those in the Founders’ and Advisors’ pools that are held in an inaccessible vesting contract.
An open letter on Taylor's current situation. Where we are, what we have and what are the options.
Give us your feedback.https://t.co/ZRah41wDR5
— Taylor (@SmartTaylorApp) May 26, 2018
The Taylor project – founded to create a “smart cryptocurrency trading assistant” that delivered small profits on an ongoing basis – ran an ICO from February 21 to March 22nd, making 6,535,424 TAY tokens available for purchase.
Through the hack, Taylor lost the majority of these collected funds. The hacker collected 2,578.98 ETH from “multiple sources in a single wallet” then transferred the tokens to another wallet, which still contains the stolen ETH.
The Taylor team stated that it has contacted the IDEX team in order to delist the TAY token until clear resolution of the issue. The team attributes the hack to the same individual or group responsible for the CypheriumChain hack that occurred in March, which resulted in the alleged loss of over 17,000 ETH.
Hack Investigation Continues
On May 23, the Taylor team published an update to provide some insight on the specifics of the hack. The team stated that while detailed information cannot yet be disclosed, the loss of ETH did not occur due to a smart contract exploit.
According to the Taylor team, the hacker responsible for the loss of ETH “somehow” gained access to one of the team’s devices and took control of a 1Password file — the Taylor team was managing investor capital with a secure password managing app.
The Taylor team has engaged the service of “security specialists” in order to “track the activities” of the hacker and has informed law enforcement agencies. Given the history of cryptocurrency hacking resolution, however, the recovery of the lost capital is highly unlikely.
Taylor Issues New TAY Token
In an attempt to recover the Taylor project from the major financial loss, the Taylor team revealed its plan to issue a new TAY token. New TAY tokens will be issued to every address that held TAY at block 5663273 except for the hacker’s addresses. A detailed plan for token issuance is currently under development.
Despite the hack’s adverse impact on the Taylor project, the team stated that the development of the Taylor app will continue:
“We reassure that we will spare no efforts to find a way to mitigate the implications of this incident for every single legit token holder. We are not going anywhere!”
Cover Photo by Markus Spiske on Unsplash