Recently, it was revealed in a report published by the European Union that cryptocurrency has always been beset with crimes committed by professional hackers and others.
For a long time, the field of digitally encrypted currency has been most vulnerable to hacking and other forms of devious cybercrime.
All of that concern has risen to the surface this week, showing to be presciently true in the case of a recent cyber attack on CoinDash.
The cryptocurrency company succumbed to a major hack on its platform in the midst of its otherwise well-orchestrated fund raising campaign.
The Backdrop to the Hack
For any cryptocurrency company, it is a well-worn fund raising practice to launch an Initial Coin Offering (ICO).
This process is equal in concept to an Initial Public Offering of shares made by a company in the stock exchange.
In the past, many ICOs have turned out to be off-the-books in nature.
They have also been indulgent in terms of the money these companies spend throughout the process. Nearly hundreds of millions of dollars can be splurged on any of these ICOs; that explains why they’re unregulated.
CoinDash readily launched its own ICO shortly before the cyber attack. In this case, it was slated to raise funds by public Ethereum investments to those who had opted for the same.
But this was when the whole thing fell apart to a major cyber attack.
How the Hack was Carried Out
The hacking attack, when it came, was swift and stealthy to say the least. It was right in the initial moments of the ICO that operations started spinning out of control.
The hackers had broken into the website and had changed the address of the virtual destination to which the contributors were sending funds.
As a result, all the funds that should have gone ideally to CoinDash for the ICO were now in the hands of people who had perpetrated the attack in the first place.
Within minutes of the beginning of the ICO, the company was compelled to come up with an official statement informing all the subscribers and customers that the website’s platform had been hacked.
That was the end of all those well-laid plans.
CoinDash found that $7 million in Ethereum had been transferred by early investors to the fraudulent address—a major loss to the company, as well as to its supportive contributors.
A Dent in Reputation
While it has been identified as a case of hacking, people also started to gossip that it could be a hoax perpetrated by CoinDash itself.
Many did not believe at the time that such a secure platform could be hacked so easily.
Online, theories were raised about whether or not CoinDash had done this trick deliberately to bag only the investments made by initial contributors.
CoinDash has repeatedly defended their stance and denied any knowledge or involvement in such a deed.
CoinDash also assured all of its new buyers that the breach would be investigated and that the affected early investors should fill out a form to verify their purchases for compensation.
The company added that whenever any new development emerges, the same will be informed and action will be taken at the instant.
The Final Word
The CoinDash hack has exposed yet another lack in the security and legal structure of the market of cryptocurrency products in the world.
Security measures are now expected to become tighter against hacking and all other types of cybercrime happening in this field.
It is also hoped that other cryptocurrency trading companies will take a cue from this incident and focus on building more secure platforms for transactions.
With the rate at which such cybercrime is taking place, it would be reassuring only when people experience only the highest level of security and safety in trading emerging digital currencies.