Parity Technologies Hacked: Hacker gets off with over $32mn in Ether

Parity Technologies Hacked: Hacker gets off with over $32mn in Ether

Yesterday, a hacker was able to break into many private multi-sig wallets made by Parity Technologies. The hacker exploited a critical vulnerability that existed in the code and was able to get off with over $32mn from private accounts.

Multi-sig wallets are essentially wallets that require multiple signatures to validate a transaction. Usually, this kind of wallets is much more secure for businesses and large private holdings. So, it shook the whole Ethereum community. Just after news of the hack came out, Ethereum dropped by 15%, from $230 to $200.

A few hours later, the vulnerability was fixed but the Ether was lost.

This comes just a few days after CoinDash’s failed ICO.

CoinDash’s ICO was going quite well; they raised a few million dollars in the first hour of the ICO. Unfortunately for them, a hacker was able to target them in their most vulnerable spot; their website. The hacker changed the address on the website to a private wallet and investors unbeknownst to them sent their Ether (ETH) directly to the hacker. It was a simple hack and it worked brilliantly for the hacker. He was able to get off with over $7.8mn.

We thought that the hack was going to be an isolated incident and would put the whole community on its toes.

What does this mean for the future?

Litecoin founder Charlie Lee tweeted this after he heard of the Parity Technologies hack:

“If the creator of Solidity, Gavin Wood, cannot write a secure multi-sig wallet in Solidity, pretty much confirms Ethereum is hacker paradise”

And Lee brings out a key point. We hear a lot about Ether being stolen from different ICOs or hacks in recent months. It’s been a hacker’s paradise because they can practically never be caught by the company or the law. Should people who invest in ICOs or hold Ether in private wallets trust the creators of the wallets?

In the case of Parity Technologies, The White Hat group was able to syphon off the rest of the funds from multi-sig wallets to another wallet. The group also stated that all people whose funds have disappeared will be compensated soon. Since their wallet is public, you can access it here. The wallet currently holds over $85mn in Ether rescued from multi-sig wallets.

Hopefully, the cryptocurrency community can be aware of its security issues and work to makes sure that there are no vulnerabilities. This kind of heist can be much more devastating. They were only able to get $32mn since the hackers weren’t able to get funds off of every multi-sig wallet. But you never know what hackers can come up with.

Check out our article on the best Ether Broker in the market right now!

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About Article Author

Martina Kelowsky
Martina Kelowsky

Currently working on her Master Degree in Economics & Computer Science she lives in Russia. She is a Bitcoin Enthusiast since 2013 and Investor in various ICO since 2014. She aims to democratize a future where money is decentralized and transaction anonymous.

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