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Hackers steal $32m of cryptocurrency Ethereum and cause price to crash below $200

Ethereum – the second biggest cryptocurrency behind Bitcoin – has suffered another hacking that has caused 153,000 ether to disappear from a multi-signa...

Callum Rivett
|Jul 20|magazine7 min read

Ethereum – the second biggest cryptocurrency behind Bitcoin – has suffered another hacking that has caused 153,000 ether to disappear from a multi-signature wallet.

Valued at around $32m, the ether was taken from a Parity Technologies wallet, one of the most trusted and secure wallets around.

The hack and loss of funds is particularly troublesome, as the founder of Parity is Gavin Wood, a co-founder of Ethereum. Wood also wrote the initial implementation for Ethereum in 2014.

White hat hackers saved Parity users by draining all other multi-sig wallets on Parity – a total worth of $75m – with the funds promised to be returned when the vulnerability is fixed.

According to Coindesk, the hack caused the price of ether to drop below $200 for the second time in a week, having previously hit highs of nearly $400 back in mid-June.

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At the time of writing, Ethereum has rebounded slightly to $213 but is still some way off its all-time high of $391.

Graph of Ethereum dropping below $200

Having started the year at below $10, Ethereum has enjoyed astonishing growth but still has problems.

Charlie Lee, creator of Litecoin, tweeted that “Ethereum is a hacker’s paradise” because even Wood cannot write a secure multi-sig wallet.  

If the creator of Solidity, Gavin Wood, cannot write a secure multisig wallet in Solidity, pretty much confirms Ethereum is hacker paradise. https://t.co/WAR3eltfWl

— Charlie Lee (@SatoshiLite) July 19, 2017

Earlier this week, an initial coin offering of Ethereum-based start-up CoinDash was hacked when the wallet address on the project’s webpage was changed, causing $10m worth of ether to be pilfered.

Around 2,000 investors sent 37,000 ethers to the fake address, unaware of the change. This figure rose to 43,500 in the days following the hack, bringing the total stolen to around $10.3m.

Ethereum came about after a hack – in June 2016, hackers managed to exploit a vulnerability and secure themselves 3.6m ether – which is now worth about $742m.

This then caused the management to create a hard fork, therefore splitting Ethereum into two separate cryptocurrencies but effectively undoing the theft.