Bancor Hacked: 13.5 Million Gone!

Jul 12, 2018 at 15:28 Update Date :Jul 12, 2018 at 15:28 UTC

The Israeli start-up has reportedly endured a cyber attack, which attempted to steal $23.5 million in cryptocurrency.

Earlier this week, it was revealed that a cryptocurrency wallet on its network had been compromised. This wallet was illegitimately used to extract $12.5 million worth of Ethereum (ETH) and $1 million in Pundi X Tokens (NPXS), while removing $10 million in the Bancor Network Tokens (BNT).

Bancor mentioned that after singling out the compromised wallet, the company was able to pacify the mutilation by freezing the transfer of BNT. This brought the cost of the loss down to roughly around $13.5 million. They say it was ‘not possible’ however, to freeze the Ether tokens.

Furthermore, the network adds,

“We are now working with dozens of cryptocurrency exchanges to trace the stolen funds and make it more difficult for the thief to liquidate them.”

According to the CoinMarketCap data, Ethereum has lost nearly 7.7% of its value in the last 24 hours and Pundi X declined around 15%. Also, the company’s own digital currency is down 16.6%.

Bancor provides additional information through an update, wherein it is to ‘clarify’ what actually happened.

“A Smart Token like BNT has price discovery build into the smart contract. By sending the smart contract ETH (essentially buying BNT), new BNT tokens are issued and ETH is stored in a connected balance. When BNT is sent back to the smart contract (essentially selling BNT), the BNT tokens are destroyed and a proportional amount of ETH is removed from the token’s connected balance and sent to the seller.”

The network believes that this is the reason why they were able to minimize the adverse effects of the hack. Bancor firmly believes that this ability is a preventative measure essential to most tokens and it is necessary to protect the network and token holders in a state of emergency.

There has been a feeling of dubiousness, however, regarding whether or not the platform can precisely be considered a decentralized one. It essentially comes after this hack took place and also, after being revealed that Bancor holds the ability to freeze transactions.

The developer of Litecoin, Charlie Lee made a remark over this incident, citing that if an exchange is capable of losing customer funds or of freezing them, it is not decentralized in the true sense. Bancor, on the other hand, can do both.

Nevertheless, investors appear to be thankful for the safety of their digital assets. Additionally, Bancor states that the tokens would very cautiously be reintroduced to the platform. The reintroduction will begin with the BNT/ETH converter.

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