The Israeli-based decentralized cryptocurrency Bancor exchange is the last victim of a security breach in the cryptocurrency industry.
According to a statement published by the Bancor exchange, an unknown hacker has stolen roughly $13.5 million worth of cryptocurrency.
The security breach occurred on July 9, 2018 at 00:00 UTC, the attackers gained access to one of the wallets operated by the Israeli exchange, no user wallets were compromised.
This morning (CEST) Bancor experienced a security breach. No user wallets were compromised. To complete the investigation, we have moved to maintenance and will be releasing a more detailed report shortly. We look forward to being back online as soon as possible.
— Bancor (@Bancor) July 9, 2018
Bancor exchange doesn’t operate as a classic exchange platform, it used a complex mechanism based on smart contracts running on the Ethereum platform to improve the speed of transactions compared with classic exchange platforms.
“With Bancor exchange, every transaction is executed directly against a smart contract. This means that converting a cryptocurrency does not require matching two parties in real-time with opposite wants; rather, it can be completed by a single party directly through the token’s smart contract.” reads the company.
The attackers gained the access to a company wallet to withdraw $12.5 million (24,984 Ether (ETH) from Bancor smart contracts and transfer the funds to a private wallet they controlled.
The attackers also withdrew 229,356,645 Pundi X (NPXS) ($1 million) from another wallet.
The attackers also withdrew 3,200,000 Bancor tokens (BNT) (roughly $10 million) that were obtained by Bancor last year as part of its ICO that raised over $150 million. Fortunately, a security feature in Bancor tokens allowed the company to freeze the transfers of funds making impossible for the hackers to move them to other wallets.
Here is the latest update on the recent security breach: pic.twitter.com/JroypFvBri
— Bancor (@Bancor) July 9, 2018
“It is not possible to freeze the ETH and any other stolen tokens,” reads the statement published by Bancor.
“However, we are working together with dozens of cryptocurrency exchanges to trace the stolen funds and make it more difficult for their thief to liquidate them.”
Bancor did not reveal how the hackers have breached its wallet and stolen the funds.
