EtherCrash "Cold Wallet" Compromised

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EtherCrash

EtherCrash is an online gambling website which supposedly had funds stolen from a cold wallet. Details could not be located regarding the exact nature of the breach, and it appears that the company has no means to repay the funds of investors.

No further tweets were found on Twitter after October 3rd, 2020, while the website appears to remain online.

This is a global/international case not involving a specific country.

About EtherCrash

"EtherCrash is the most established and largest gambling game for Ethereum. Based on Bustabit and provably fair with a low house edge."

"EtherCrash's outcome can be proven as fair. There are third party scripts you can use to verify the game hashes and calculate the results." "Every game starts from 0x and counts up, you can watch your wager amount being multiplied in your bet area and choose to cash out at anytime but beware if you wait too long it can crash and you will lose your entire bet."

"Increase your Ethereum holdings by investing into the bankroll of Ethercrash. By being part of the growing bankroll you can monitor your investment and see its growth or decline whenever you choose. By investing you ensure we can also have a higher max bet limit. The bankroll is used for paying out players who want to withdraw their winnings. Invest into Ethercrash today and see your money grow!"

"On October 26, 2020 Ethercrash cold wallet was compromised with 6378 ETH stolen." "Recently, AlonGal, the chief technology officer of the cybercrime intelligence company HudsonRock, tweeted that on October 27, the EtherCrash cold wallet that claimed to be "the most mature and largest gambling game in Ethereum" was stolen, with a loss of about 2.5 million U.S. dollars." "A cold wallet is one that has never been connected to the Internet. Alon Gal, chief technology officer of cyber crime intelligence company Hudson Rock, posted the notice on Twitter."

"The stolen funds were exchanged to DAI on Uniswap." "The company said in a notice [graphic below] on the proprietary freeware instant messaging and VoIP application and digital distribution platform Discord that its cold wallet had been compromised and two large withdrawals made." "EtherCrash provided the addresses to which the transfers were made and said it had changed its sweeping address."

"Asked whether there had been other thefts from EtherCrash, Gal told iTWire that he had been referring to other hacks at other companies in his tweet which read: "Another hack of around $2,500,000 happened today on EtherCrash." "He said he was referring to the attack at decentralised finance player Harvest Finance (see tweet below) which lost about US$24 million last week."

"It is reported that EtherCrash has issued a notice on Discord in which it mentioned that the EtherCrash cold wallet was stolen and there were two large withdrawals. EtherCrash stated that it will compensate users for their property losses, but it will take some time because the losses are more serious."

"Our initial plan on repaying the investors of EtherCrash is not to take any commission and have these funds pay back the investors directly," the notice said, adding, "however this may take some time." The company said it was open to ideas "on how we can make things right".

This is a global/international case not involving a specific country.

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.

Key Event Timeline - EtherCrash "Cold Wallet" Compromised

Date	Event	Description
October 26th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

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

The total amount lost has been estimated at $2,500,000 USD.

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

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

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?

Ongoing Developments

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

General Prevention Policies

Having a wallet managed through a single key held by a single individual leaves a system vulnerable to any mistakes that individual may make. It is significantly more secure to have the funds in a proper multi-signature wallet, where multiple parties must be breached or participate for funds to go missing.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.