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Hackers stole $32 million of bitcoin rival ether

by David Gilbert
Jul 20 2017, 7:00am

Hackers have stolen over $32 million worth of ether, a cryptocurrency that has soared in value almost 5,000 percent in the space of six months. The theft comes just days after another breach saw criminals steal over $7 million worth of ether simply by tricking victims into sending money to the wrong address.

The latest hack started Tuesday and continued into Wednesday, with the hackers taking advantage of a vulnerability in software from Parity Wallet, a company that describes its product as “the fastest and most secure way of interacting with the Ethereum network.”

The ether was stolen from three separate accounts using Parity Wallet’s software — online gambling website Edgeless Casino, the smart-contract platform Aeternity, and the commerce platform Swarm City, which confirmed the theft on its blog. Because of the transparent nature of the ethereum platform, you can see the theft on the network here.

While the loss of such a huge sum of money will be devastating for the companies concerned, the problem could have been much worse. After the initial theft was noticed, a group of engineers spotted the vulnerability and worked to drain other vulnerable ether wallets of their funds, diverting them into a secure online wallet.

The group managed to secure 377,000 ether – just over $75 million. “The white hat group were made aware of a vulnerability in a specific version of a commonly used multisig contract,” the group said. “This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multisig [wallet] they could find as quickly as possible.”

Ether, which underpins the ethereum platform, has emerged as a major competitor to bitcoin in recent months, with its value soaring from around $8 at the beginning of the year to a high of over $400 in June. The value of ether has fallen significantly since, and is currently trading at around $210.

While Ethereum is a barely regulated and incredibly volatile cryptocurrency, many see it as having huge potential in areas such as smart contracts, finance, and even a new decentralized internet.

But given the huge increase in its price, the ethereum network is increasingly being targeted by hackers. On Monday it emerged that hackers had replaced the address during an Initial Coin Offering, or ICO, which resulted in investors sending money directly to the hackers.

Last year hackers stole $50 million worth of ether in what is still the largest hack on the network to date.