- Jack Taylor/Getty Images
- Cryptocurrency trading startup Bancor has lost roughly $13.5 million in a security breach.
- Hackers accessed a wallet used to upgrade smart contracts and withdrew the money mostly in Ethereum, a popular cryptocurrency.
- Bancor was able to freeze $10 million of its own tokens once it noticed the breach.
Bancor, an Israeli startup and decentralized cryptocurrency trading platform, lost approximately $13.5 million in virtual currency on Monday.
According to Bancor, hackers compromised a wallet – which facilitates cryptocurrency trading – used to update smart contracts. Smart contracts are sometimes described as “digital vending machines,” and are essentially self-executing contracts which manage cryptocurrency transactions, cutting out the need for any middle-man.
Hackers then used the compromised wallet to steal three cryptocurrencies, comprising 24,984 in Ethereum tokens, (approximately $12.5 million), 229, 356, 645 NPXS (approx. $1 million) and 3,200,00 of Bancor’s own token BNT (approx. $10 million).
Once the company became aware of the hack it was able to freeze the $10 million of its own Bancor tokens (BNT), mitigating the damage somewhat.
Here is the latest update on the recent security breach: pic.twitter.com/JroypFvBri
— Bancor (@Bancor) July 9, 2018
Bancor claims that no user wallets were compromised by the attack. Some on Twitter, including Litecoin creator Charlie Lee claimed that Bancor’s response proves it is not truly decentralized.
A Bancor wallet got hacked and that wallet has the ability to steal coins out of their own smart contracts. ????♂️
An exchange is not decentralized if it can lose customer funds OR if it can freeze customer funds. Bancor can do BOTH. It's a false sense of decentralization. https://t.co/22UYygIhEF
— Charlie Lee [LTC⚡] (@SatoshiLite) July 10, 2018
Bancor raised $153 million with its initial coin offering (ICO) in June. According to CoinMarketCap, its value has depreciated by 16.17%.