Bancor Assures No Customer Funds Were Stolen, Resumes Operations
Bancor is back online. This after the website was taken offline for maintenance after being hacked earlier in the week. Bancor network, an Israeli decentralised exchange is the latest victim of cyber attacks targeting cryptocurrency exchanges.
We are happy to announce that the Bancor Network is back online. We will gradually be adding tokens back to the network beginning with the BNT / ETH converter. https://t.co/zyZKV3TrsA
— Bancor (@Bancor) July 11, 2018
Bancor has however assured that no customer funds were stolen.
“No customer wallets were broken into. The ETH was stolen out of BNT’s connector balance (like a reserve). The rest of the stolen tokens were taken from smart contracts that the breached wallet has access to on the network. No customer wallets were compromised,” the company said in a statement posted on Twitter.
$13.5 million worth of Ethereum and PundiX tokens were lost on Monday after attackers breached its security systems. Markets responded to the news with ethereum losing about 7% of its value on Tuesday and PundiX shedding about 15%.
As indicated in our price analysis on Tuesday, news of the hacking had little effect on the market initially compared to similar news in the past. Volumes had started rising towards the end of Tuesday indicating the hacking had been fully absorbed. Bitcoin is currently trading at $6189, representing a drop of about 2.6% in the last 24 hours.
According to the firm, a wallet used to upgrade some smart contracts was compromised. This compromised wallet was then used to withdraw ETH from the BNT smart contract in the amount of 24,984 ETH, the company said in a statement. Nearly 230 million PundiX tokens worth approximately 1 million and 3.2 million BNT tokens estimated to be worth 30 million were also stolen.
Here is the latest update on the recent security breach: pic.twitter.com/JroypFvBri
— Bancor (@Bancor) July 9, 2018
The stolen BNT tokens were however frozen preventing the thief “from running away with the stolen tokens, Bancor said. The ability to freeze tokens is built into the Bancor protocol.
The company says it is working to restore services and track down the criminals. “We are now working together with dozens of cryptocurrency exchanges to trace the stolen funds and make it more difficult for the thief for the thief to liquidate them.
The company raised $150 million in an ICO last year. Its claim to having a built-in decentralised exchange has however been punctured following the hacking not least by Litecoin’s Charlie Lee.
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
Ethereum founder Vitalik Buterin also voiced his disapproval for centralised exchanges recently.
A recent report by US based security firm CipherTrace showed that $761 million in cryptocurrencies had been stolen in the first six months of 2018 compared to $266 million in the whole of 2017.