Another ICO hack has occurred. The victim this time is a company by the name of KickCoin. In a statement released on July 26th, Anti Danilevski (CEO) released a statement detailing the situation. He stated, “The hackers gained access to the private key of the owner of the KickCoin smart contract. In order to hide the results of their activities, they employed methods used by the KickCoin smart contract in integration with the Bancor network…thanks to the rapid response of our community and our coordinated team work, we were able to regain control over the tokens and prevent further possible losses by replacing the compromised private key with the private key of the cold storage.”
New Methods of Theft
Although not the largest hack heard of, the company lost over $7.7 million worth of tokens. Thieves were able to steal this amount by attaining the private keys to the company’s smart contract. By obtaining this information, the thieves were able to create 40 fraudulent wallets. While doing this, they deleted 40 legitimate wallets. To go unnoticed, they ensured that the new wallets contained the exact amount of tokens contained in the wallets that they deleted. This bought them time to go about their business, as the token count went unchanged. The team at KICKICO wasn’t made aware of the issue until those that owned the 40 destroyed wallets spoke up, and inquired about their missing funds. Thankfully KICKICO has stated that no participants in the crowd sale will be affected. The company will cover all losses.
This event just underlines the need for more stringent security protocols. Thieves are continually finding new inventive ways to steal money. They are constantly poking and finding holes in code, and lapses in security measures. To put investors’ minds at ease, Danilevski assured them, “…control over the smart contract has been fully restored…the problem is completely eliminated, the wallets of KickCoin holders are safe.”
This event comes after a series of high profile thefts in the crypto world over the past year. Between funds stolen from exchanges and ICOs, it is estimated that over $750 million has been stolen in 2018. There are still 5 months remaining. Although the lure of staggering returns is strong, investors need to become better aware of the risks involved when investing in ICOs. This means of fund-raising has a potentially to be hugely positive, but success stories make investors give their money away to untested companies. Companies that have no track record of successful custodian ships of such large sums of money. Until investors become more scrupulous with their participation in ICOs, expect for these crowd sales to continue garnering the attention of thieves.