QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$23 000 000 USD
JULY 2018
SWITZERLAND
BANCOR
DESCRIPTION OF EVENTS
“Bancor, a decentralized, self-proclaimed noncustodial exchange created in opposition to centralized ones (those which Vitalik Buterin had recently addressed his angry "burn in hell" statement) was attacked by hackers on July 9, 2018. It is noteworthy that this happened a day after the exchange expressed full agreement with Buterin in an official Twitter post about centralized decisions and stated that decentralized exchanges are the future.” “hackers stole $23.5 million in cryptocurrency from the 'decentralized' crypto exchange Bancor. The loss included $12.5 million in Ethereum along with BNT and NPXS tokens totaling $11 million. This massive security breach forced the firm to shut down operations. Bancor had been one of the more high-profile Initial Coin Offerings (ICOs) of 2017, raking in $153 million during its token sale event. According to Bancor, a wallet used to update some smart contracts was breached and used to withdraw the cryptocurrency.”
This was apparently called a decentralized exchange; however it would appear that the funds were instead protected by smart contracts. One of the issues with Ethereum is that its complex scripting language often leaves holes and exploits, and in this case it would appear that the wallet used to update the smart contracts was itself breached. Ethereum does not inherently support a multi-signature model, making it very challenging for organizations such as cryptocurrency exchanges to properly secure their funds against theft and internal fraud.
Infographic: An Overview of Compromised Bitcoin Exchange Events (Jan 30)
100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents (Jan 25)
Q3 2018 Cryptocurrency Anti-Money Laundering Report - CipherTrace (Feb 15)
Crypto Exchange Hacks in Review: Proactive Steps and Expert Advice (Mar 2)
Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 5)
SlowMist Hacked - SlowMist Zone (May 18)
