Gatecoin Hack
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Gatecoin was one of the first regulated digital asset exchanges. This didn’t stop the hack of 185,000 ETH and 250 BTC. According to a forensic analysis, the exchange may have been the victim of a man-in-the-middle attack. The malicious external party involved in this breach managed to alter their system so that BTC and ETH deposit transfers bypassed the multisig cold storage and went directly to the hacker’s hot wallet during the breach period. The company fired their CTO, managed to raise $500k in order to reopen, and ultimately repaid all customers. They were saved by maintaining large cold wallet reserves which appear to have been properly stored, and appear to have dealt with the issue transparently. Having hot wallet insurance would have further assisted with the recovery; however a system like Proof of Reserves or an automated alert system could have allowed the issue to be noted sooner.
This exchange or platform is based in Hong Kong, or the incident targeted people primarily in Hong Kong.
About Gatecoin
"News emerged last week of yet another security event in the digital currency exchange ecosystem, this time impacting a Hong Kong-based service involved in the sale of assets related to Ethereum-based decentralized autonomous organizations (DAOs). As reported on Friday, Gatecoin experienced a cyberattack on its hot wallets that resulted in the loss of funds. A new update from the exchange team indicated that as much as $2m was lost, confirming rumors that circulated soon after the hack became apparent."
This exchange or platform is based in Hong Kong, or the incident targeted people primarily in Hong Kong.
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.
| Date | Event | Description |
|---|---|---|
| May 1st, 2016 12:00:47 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
Coming soon.
References
Liquidators put the final nail in Gatecoin’s coffin (Feb 2)
Previously Hacked Gatecoin Exchange Receives Liquidation Order Following Banking Problems (Feb 2)
Gatecoin Crypto Exchange to Shut Down on Court’s Orders - CoinDesk (Feb 2)
Bitcoin Scams and Cryptocurrency Hacks List - BitcoinExchangeGuide.com (Mar 4)
SlowMist Hacked - SlowMist Zone (Jun 25)