CoinZest Accidental Airdrop - Revision history

Azoundria at 18:58, 1 May 2023

2023-05-01T18:58:05Z

← Older revision		Revision as of 12:58, 1 May 2023
Line 1:		Line 1:
	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}}		{{Imported Case Study 2\|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}}
	{{Unattributed ~~Citations~~}}		{{Unattributed Sources}}

	[[File:Coinzest.jpg\|thumb\|CoinZest]]CoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down.		[[File:Coinzest.jpg\|thumb\|CoinZest]]CoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down.

	This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.		This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.<ref name="fullycrypto-3994" /><ref name="coinzest-3995" /><ref name="coinzestarchive-3996" /><ref name="coinzestarchive-3997" /><ref name="cryptocompare-3998" /><ref name="cryptowisser-3999" /><ref name="coinzest-4000" /><ref name="cryptonews-4001" /><ref name="coinzestarchive-4002" /><ref name="youniversitytv-7677" />
	<ref name="fullycrypto-3994" /><ref name="coinzest-3995" /><ref name="coinzestarchive-3996" /><ref name="coinzestarchive-3997" /><ref name="cryptocompare-3998" /><ref name="cryptowisser-3999" /><ref name="coinzest-4000" /><ref name="cryptonews-4001" /><ref name="coinzestarchive-4002" /><ref name="youniversitytv-7677" />

	== About CoinZest ==		== About CoinZest ==
Line 57:		Line 56:
	!Description		!Description
	\|-		\|-
	\|January 23rd, 2019 ~~12:00:00 AM~~		\|January 23rd, 2019
	\|Main Event		\|Main Event
	\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
Line 65:		Line 64:
	\|		\|
	\|}		\|}

			== Technical Details ==
			This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

	== Total Amount Lost ==		== Total Amount Lost ==
Line 84:		Line 86:
	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
			== General Prevention Policies ==
			The CoinZest case is worth platform operators studying, though obviously there is no sure-fire way to prevent balances being wrong. Hot wallets should of course be insured or based on company funds, and our industry insurance fund would be one of few models that would be able to cover such an event. A multi-sig on cold storage provides an increased opportunity to detect the imbalance before funds are released. Exchange platform users are under the obligation to return funds in cases like this, with multi-sig minimizing damanges and the insurance fund covering what ultimately can't be collected.
			== Individual Prevention Policies ==
			{{Prevention:Individuals:Placeholder}}

			{{Prevention:Individuals:End}}

			== Platform Prevention Policies ==
			{{Prevention:Platforms:Placeholder}}

			{{Prevention:Platforms:End}}

			== Regulatory Prevention Policies ==
			{{Prevention:Regulators:Placeholder}}

	== Prevention ~~Policies ==~~		{{Prevention:Regulators:End}}
	The CoinZest case is worth platform operators studying, though obviously there is no sure-fire way to prevent balances being wrong. Hot wallets should of course be insured or based on company funds, and our industry insurance fund would be one of few models that would be able to cover such an event. A multi-sig on cold storage provides an increased opportunity to detect the imbalance before funds are released. Exchange platform users are under the obligation to return funds in cases like this, with multi-sig minimizing damanges and the insurance fund covering what ultimately can't be collected.

	== References ==		== References ==
	<references><ref name="fullycrypto-3994">[https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto] (Oct 1, 2021)</ref>		<references><ref name="fullycrypto-3994">[https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto] (Oct 2, 2021)</ref>

	<ref name="coinzest-3995">[http://kr.coinzest.com/ 코인제스트] (Oct 18, 2021)</ref>		<ref name="coinzest-3995">[http://kr.coinzest.com/ 코인제스트] (Oct 19, 2021)</ref>

	<ref name="coinzestarchive-3996">[https://web.archive.org/web/20191229094409/https://kr.coinzest.com/ 코인제스트] (Oct 18, 2021)</ref>		<ref name="coinzestarchive-3996">[https://web.archive.org/web/20191229094409/https://kr.coinzest.com/ 코인제스트] (Oct 19, 2021)</ref>

	<ref name="coinzestarchive-3997">[https://web.archive.org/web/20191225145256/http://kr.coinzest.com/error 코인제스트] (Nov 9, 2021)</ref>		<ref name="coinzestarchive-3997">[https://web.archive.org/web/20191225145256/http://kr.coinzest.com/error 코인제스트] (Nov 10, 2021)</ref>

	<ref name="cryptocompare-3998">[https://www.cryptocompare.com/exchanges/coinzest/overview https://www.cryptocompare.com/exchanges/coinzest/overview] (Nov 9, 2021)</ref>		<ref name="cryptocompare-3998">[https://www.cryptocompare.com/exchanges/coinzest/overview https://www.cryptocompare.com/exchanges/coinzest/overview] (Nov 10, 2021)</ref>

	<ref name="cryptowisser-3999">[https://www.cryptowisser.com/exchange/coinzest/ CoinZest – Reviews, Trading Fees & Cryptos (2021) \| Cryptowisser] (Nov 9, 2021)</ref>		<ref name="cryptowisser-3999">[https://www.cryptowisser.com/exchange/coinzest/ CoinZest – Reviews, Trading Fees & Cryptos (2021) \| Cryptowisser] (Nov 10, 2021)</ref>

	<ref name="coinzest-4000">[http://coinzest.com/?mod=list&pageid=1 코인제스트] (Nov 9, 2021)</ref>		<ref name="coinzest-4000">[http://coinzest.com/?mod=list&pageid=1 코인제스트] (Nov 10, 2021)</ref>

	<ref name="cryptonews-4001">[https://cryptonews.com/news/exchange-coinzest-accidentally-dishes-out-crypto-worth-usd-5-3243.htm Exchange CoinZest Accidentally Dishes out Crypto Worth USD 5.3m] (Nov 9, 2021)</ref>		<ref name="cryptonews-4001">[https://cryptonews.com/news/exchange-coinzest-accidentally-dishes-out-crypto-worth-usd-5-3243.htm Exchange CoinZest Accidentally Dishes out Crypto Worth USD 5.3m] (Nov 10, 2021)</ref>

	<ref name="coinzestarchive-4002">[https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp] (Nov 9, 2021)</ref>		<ref name="coinzestarchive-4002">[https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp] (Nov 10, 2021)</ref>

	<ref name="youniversitytv-7677">[https://www.youniversitytv.com/crypto-blockchain/korean-self-regulatory-crypto-industry-body-under-question-after-12-crypto-exchanges-approved/ Korean Self-regulatory Crypto Industry Body Under Question After 12 Crypto Exchanges Approved \| YOUniversityTV] (May 8, 2022)</ref></references>		<ref name="youniversitytv-7677">[https://www.youniversitytv.com/crypto-blockchain/korean-self-regulatory-crypto-industry-body-under-question-after-12-crypto-exchanges-approved/ Korean Self-regulatory Crypto Industry Body Under Question After 12 Crypto Exchanges Approved \| YOUniversityTV] (May 8, 2022)</ref></references>

Azoundria at 07:53, 17 February 2023

2023-02-17T07:53:14Z

← Older revision		Revision as of 01:53, 17 February 2023
Line 1:		Line 1:
	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}}		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}}
			{{Unattributed Citations}}

	[[File:Coinzest.jpg\|thumb\|CoinZest]]CoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down.		[[File:Coinzest.jpg\|thumb\|CoinZest]]CoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down.

	This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.		This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.
			<ref name="fullycrypto-3994" /><ref name="coinzest-3995" /><ref name="coinzestarchive-3996" /><ref name="coinzestarchive-3997" /><ref name="cryptocompare-3998" /><ref name="cryptowisser-3999" /><ref name="coinzest-4000" /><ref name="cryptonews-4001" /><ref name="coinzestarchive-4002" /><ref name="youniversitytv-7677" />

	== About CoinZest ==		== About CoinZest ==
Line 35:		Line 37:

	Don't Include:		Don't Include:

	* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.		* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
	* Anything that wasn't reasonably knowable at the time of the event.		* Anything that wasn't reasonably knowable at the time of the event.
Line 57:		Line 58:
	\|-		\|-
	\|January 23rd, 2019 12:00:00 AM		\|January 23rd, 2019 12:00:00 AM
	\|~~First~~ Event		\|Main Event
	\|~~This is an expanded~~ description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
	\|-
	\|
	\|
	\|
	\|-		\|-
	\|		\|
Line 70:		Line 67:

	== Total Amount Lost ==		== Total Amount Lost ==
	The total amount lost ~~is unknown~~.		The total amount lost has been estimated at $5,300,000 USD.

	How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?		How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Line 81:		Line 78:

	== Total Amount Recovered ==		== Total Amount Recovered ==
	~~It is unknown how much was~~ recovered.		There do not appear to have been any funds recovered in this case.

	What funds were recovered? What funds were reimbursed for those affected users?		What funds were recovered? What funds were reimbursed for those affected users?
Line 92:		Line 89:

	== References ==		== References ==
	[https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto] (Oct 1)		<references><ref name="fullycrypto-3994">[https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto] (Oct 1, 2021)</ref>

	[http://kr.coinzest.com/ 코인제스트] (Oct 18)		<ref name="coinzest-3995">[http://kr.coinzest.com/ 코인제스트] (Oct 18, 2021)</ref>

	[https://web.archive.org/web/20191229094409/https://kr.coinzest.com/ 코인제스트] (Oct 18)		<ref name="coinzestarchive-3996">[https://web.archive.org/web/20191229094409/https://kr.coinzest.com/ 코인제스트] (Oct 18, 2021)</ref>

	[https://web.archive.org/web/20191225145256/http://kr.coinzest.com/error 코인제스트] (Nov 9)		<ref name="coinzestarchive-3997">[https://web.archive.org/web/20191225145256/http://kr.coinzest.com/error 코인제스트] (Nov 9, 2021)</ref>

	[https://www.cryptocompare.com/exchanges/coinzest/overview https://www.cryptocompare.com/exchanges/coinzest/overview] (Nov 9)		<ref name="cryptocompare-3998">[https://www.cryptocompare.com/exchanges/coinzest/overview https://www.cryptocompare.com/exchanges/coinzest/overview] (Nov 9, 2021)</ref>

	[https://www.cryptowisser.com/exchange/coinzest/ CoinZest – Reviews, Trading Fees & Cryptos (2021) \| Cryptowisser] (Nov 9)		<ref name="cryptowisser-3999">[https://www.cryptowisser.com/exchange/coinzest/ CoinZest – Reviews, Trading Fees & Cryptos (2021) \| Cryptowisser] (Nov 9, 2021)</ref>

	[http://coinzest.com/?mod=list&pageid=1 코인제스트] (Nov 9)		<ref name="coinzest-4000">[http://coinzest.com/?mod=list&pageid=1 코인제스트] (Nov 9, 2021)</ref>

	[https://cryptonews.com/news/exchange-coinzest-accidentally-dishes-out-crypto-worth-usd-5-3243.htm Exchange CoinZest Accidentally Dishes out Crypto Worth USD 5.3m] (Nov 9)		<ref name="cryptonews-4001">[https://cryptonews.com/news/exchange-coinzest-accidentally-dishes-out-crypto-worth-usd-5-3243.htm Exchange CoinZest Accidentally Dishes out Crypto Worth USD 5.3m] (Nov 9, 2021)</ref>

	[https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp] (Nov 9)		<ref name="coinzestarchive-4002">[https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp] (Nov 9, 2021)</ref>

	[https://www.youniversitytv.com/crypto-blockchain/korean-self-regulatory-crypto-industry-body-under-question-after-12-crypto-exchanges-approved/ Korean Self-regulatory Crypto Industry Body Under Question After 12 Crypto Exchanges Approved \| YOUniversityTV] (May 8)		<ref name="youniversitytv-7677">[https://www.youniversitytv.com/crypto-blockchain/korean-self-regulatory-crypto-industry-body-under-question-after-12-crypto-exchanges-approved/ Korean Self-regulatory Crypto Industry Body Under Question After 12 Crypto Exchanges Approved \| YOUniversityTV] (May 8, 2022)</ref></references>

Azoundria: Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}} CoinZestCoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down. This exchange or platform..."

2023-01-24T21:44:06Z

Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}} thumb|CoinZestCoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down. This exchange or platform..."

New page

{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/coinzestaccidentalairdrop.php}}

[[File:Coinzest.jpg|thumb|CoinZest]]CoinZest launched a large cryptocurrency exchange platform in South Korea. However, one promotion gone wrong caused a massive loss as the exchange distributed and allowed the withdrawal of $5.3m worth of crypto-assets. Attempts at recovery of the funds were unsuccessful and the platform later shut down.

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

== About CoinZest ==
"Founded in 2018, Coinzest is a centralized cryptocurrency exchange located in South Korea. It provides users with Crypto to Crypto and Crypto to Fiat trade services, as well as other financial/investment tools." "CoinZest is an exchange registered in South Korea that launched in June 2018. Accordingly, the exchange recently celebrated its 1 year-anniversary."

"The exchange provides information on its parent company (Zest C&T Co., Ltd) and its CEO (Jeon Jonghee, Kim Seungyong) on its website." "Over 50 coins are already listed on the Coinzest exchange, all of which are traded in 71 different markets. The platform allows for extensive market analysis through its user friendly interface that is equipped with numerous chatting tools and indicators."

"CoinZest has added to the recent spell of bad news for Korean exchanges when it was revealed that they accidentally airdropped millions of dollars’ worth of cryptocurrency to their users after a promotional campaign backfired. After realizing their mistake, CoinZest conducted a ‘rollback’ on their servers that undid the airdrop and returned the tokens to the exchange, but not before those who got wise had made hasty withdrawals. This mistake added to the news earlier this week that a CEO and an executive of another Korean exchange, Komid, had been given jail sentences for falsifying trading volume."

"CoinZest were involved in a promotion with gaming blockchain project Wager Games, where they intended to hand out hundreds of WGT tokens to their customers, but a “computer error” led to them mistakenly dishing out over $5 million worth of Bitcoin, Ethereum, and other cryptocurrencies instead. CoinZest’s servers were taken temporarily offline as developers raced to resolve the problem by restoring databases to their pre-error state. They also contacted customers who had withdrawn the airdropped tokens, asking them to return them, but this seems to have fallen on deaf ears, as it is reported that some $2.6 million worth is yet to be returned. Whether the customers have any legal right to return the money is as yet unknown and something that, presumably, CoinZest will investigate."

"The CoinZest error is the first known case when an exchange has accidentally put crypto into user accounts. In February 2018 the Zaif exchange temporarily offered customers the opportunity to buy Bitcoin for free due to a computer glitch, although all transactions were cancelled upon discovery of the error. CoinZest’s case is different as up to half the funds may already have been moved on, which presents a huge logistical problem if they wish to reclaim any or all of those funds."

"CoinZest has blamed a “computer error” for the mishap. The exchange’s servers temporarily went offline as developers attempted to resolve the problem, looking to restore databases to their pre-error state, and contacting customers who have made Korean won withdrawals on the funds. The exchange says it has already recovered half of the funds, but, per most recent reports, some USD 2.6 million is yet to be returned."

"Of course, the right thing to do would have been to return the crypto to the exchange. But, those of us who have had our crypto wallets clogged up with valueless airdropped coins that we neither want nor asked for might just be raising a glass to those who withdrew before the servers were reset."

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

* Known history of when and how the service was started.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.

Don't Include:

* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
* Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - CoinZest Accidental Airdrop
!Date
!Event
!Description
|-
|January 23rd, 2019 12:00:00 AM
|First Event
|This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.
|-
|
|
|
|-
|
|
|
|}

== Total Amount Lost ==
The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

== Total Amount Recovered ==
It is unknown how much was recovered.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?

== Prevention Policies ==
The CoinZest case is worth platform operators studying, though obviously there is no sure-fire way to prevent balances being wrong. Hot wallets should of course be insured or based on company funds, and our industry insurance fund would be one of few models that would be able to cover such an event. A multi-sig on cold storage provides an increased opportunity to detect the imbalance before funds are released. Exchange platform users are under the obligation to return funds in cases like this, with multi-sig minimizing damanges and the insurance fund covering what ultimately can't be collected.

== References ==
[https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto https://fullycrypto.com/coinzest-exchange-accidentally-hands-out-5-3-million-in-crypto] (Oct 1)

[http://kr.coinzest.com/ 코인제스트] (Oct 18)

[https://web.archive.org/web/20191229094409/https://kr.coinzest.com/ 코인제스트] (Oct 18)

[https://web.archive.org/web/20191225145256/http://kr.coinzest.com/error 코인제스트] (Nov 9)

[https://www.cryptocompare.com/exchanges/coinzest/overview https://www.cryptocompare.com/exchanges/coinzest/overview] (Nov 9)

[https://www.cryptowisser.com/exchange/coinzest/ CoinZest – Reviews, Trading Fees & Cryptos (2021) | Cryptowisser] (Nov 9)

[http://coinzest.com/?mod=list&pageid=1 코인제스트] (Nov 9)

[https://cryptonews.com/news/exchange-coinzest-accidentally-dishes-out-crypto-worth-usd-5-3243.htm Exchange CoinZest Accidentally Dishes out Crypto Worth USD 5.3m] (Nov 9)

[https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp https://web.archive.org/web/20190703132951/https://www.coinzest.co.kr/app/cxweb/cb/CB1001.jsp] (Nov 9)

[https://www.youniversitytv.com/crypto-blockchain/korean-self-regulatory-crypto-industry-body-under-question-after-12-crypto-exchanges-approved/ Korean Self-regulatory Crypto Industry Body Under Question After 12 Crypto Exchanges Approved | YOUniversityTV] (May 8)