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18 July 2017 - Fraudsters steal US$7m by hacking a cryptocoin offering
Source -$7-million-by-hacking-a-cryptocoin-offering?utm_source=Mailing+List&utm_campaign=b6fb79d629-Monday_Morning_Perspectives_July_2017_te07_24_2017&utm_medium=email&utm_term=0_d0fc96eb87-b6fb79
Where - United States of America
Cost - 7,000,000 USD
Business line - Corporate Finance

Fraudsters have managed to steal US$7m worth of cryptocurrency by hacking into an initial coin offering (ICO), a method used by many new cryptocurrency firms to raise funds. The process allows people to buy virtual tokens from crypto start-ups, which are intended to increase in value as the company grows.

Hackers altered the ethereum address (a blockchain-based platform which allows transactions and contracts to be facilitated online) used by CoinDash in its ICO to collect funds. As a result, investors sent their payments to hackers instead of CoinDash.

The Israel-based firm temporarily suspended its site upon discovery of the attack and later released a statement reassuring those who sent funds to the fraudulent address that they would still receive the CoinDash tokens (CDTs) they were entitled to through the sale.

CoinDash said in a statement that the equivalent of US$7m was stolen by an unknown perpetrator. However, the firm did still manage to raise some money from the ICO. “The CoinDash Token Sale secured US$6.4m from our early contributors and whitelist participants and we are grateful for your support and contribution,” it said.

It added: “CoinDash is responsible to all of its contributors and will send CDTs reflective of each contribution. Contributors that sent ETH to the fraudulent Ethereum address, which was maliciously placed on our website, and sent ETH to the official address will receive their CDT tokens accordingly.” The firm said it would not be compensating anyone who sent funds to the fraudulent address after the CoinDash site was closed down.

“This was a damaging event to both our contributors and our company, but it is surely not the end of our project. We are looking into the security breach and will update you all as soon as possible about the findings,” it added.