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Another cryptocurrency trading startup has been breached losing $13.5 million

An Israeli cryptocurrency trading startup has been breached losing $13.5 million according to the company’s official Twitter account. The tokens lost in the breach mostly comprise of Ether but the startup has reassured its users in another tweet that no personal wallets were touched.

The company at the center of this breach is Bancor, an Israeli startup which is decentralized and offers users a simple and cheap way of converting their tokens directly from their wallets. In a statement released yesterday, the startup claims it experienced a security breach and they had to suspend all trading to resolve the issue.

They are still investigating what happened but so far they have determined that a wallet which is used to upgrade some smart contracts was compromised. The hacker then proceeded to use the compromised wallet to withdraw ETH from the Bancor smart contract worth $12.5M (24,984 ETH). The wallet also stole 229,356,645 NPXS tokens worth 1M and 3,200,000 Bancor (BNT) tokens worth $10M.

However, using the built-in Bancor Protocol the startup was able to freeze the BNT tokens.

“Once the theft was identified, we were able to freeze the stolen BNT, limiting the damage to the Bancor ecosystem from the theft. The ability to freeze tokens was built into Bancor Protocol to be used in an extreme situation to recover from a security breach, allowing Bancor to effectively stop the thief from running away with the stolen tokens.”

The startup adds that since it was impossible to freeze the ether tokens, they are now working with multiple crypto exchanges to make it difficult for the thief to liquidate the coins.

The startup is based in Tel Aviv and started operation last year after raising $153 million in an ICO. Also, recently the company launched a community-based token in Kenya.

Now that another cryptocurrency trading startup has been breached, what measures should crypto trading platforms take to guarantee security? Share your thoughts in the comment section below.

coinmag

Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.

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