Ethereum Initial Coin Offering or Ethereum ICO are increasingly being targeted by hackers. This time to fall was Veritaseum. Veritaseum in a post on their Slack channel have announced that a hacker got away with at least $8 million on 23 July 2017. This hack follows another large attack on another Ethereum ICO earlier this week – CoinDash. The Ethereum platform has been under a slew of attacks in the month of July. How will the coin rebound?
Cryptocurrency ICOs are similar to IPOs in the stock market. The ICO business model allows developers or businessmen to quickly raise money in an unregulated fashion. This very unregulated nature of business leads to ICOs being labelled as scams. Yet, the number of people investing in ICOs keep increasing. Investors see it as an easy way to make money in Cryptocurency ICO.
Veritaseum ICO Hacked
In his slack post, Reggie Middleton (reggie.veritas) mentioned that a small amount of VERI was stolen. Veritaseum ICO was organised over this weekend. Subscribers were buying VERI tokens for a product the company was preparing to launch in the realm of financial services. VERI is the token that was being issued by Veritaseum ICO. The small amount of VERI was equivalent to $8.4 million and the tokens were transferred to 2 addresses. The hackers managed to bypass the dual factor authentication that was in place for the ICO. The hackers were very sophisticated to defeat multiple security measures implemented but left behind some bread crumbs that are being pursued. The Veritaseum team mentioned that they have fixed the vulnerabilities that were exploited by the hackers.
The hackers then sold off their VERI tokens on EtherDelta as the ICO was still on-going and there was a heavy demand for the tokens.
In his post on Bitcoin talk forum, Reggie said, “I would like to make it known that we had the option to fork VERI, but chose not to. At the end of the day, the amount stolen was miniscule (less than 00.07%) although the dollar amount was quite material.
Another point that I would like to make clear is that Veritaseum tokens are software that represent our knowledge, advisory and consulting skills, products and capabilities. Without the Veritaseum team, the tokens are literally wortheless! If someone were to someone confiscate 100% of the available tokens, all we need to do is refuse to stand behind them and recreate the token under a new contract. Again, we aren’t selling currencies, we aren’t selling securities. We are selling capabilities, and ability for those capabiliteis to connect parties P2P for the autonomous transfer of value. You can get away with a large securiteis heist, or a large currency heist. The Veritaseum team is what powers the value behind the Veritas token. A large theft of those tokens after a fork is as valuable as stealing 90M empty plastic cups.”
Ethereum ICO hack questions
So it appears that Veritaseum has rebounded and will continue with its plans. However that begs the question, are Ethereum ICOs secure. Are the measures implemented by the new business really good enough or do we need some more focus on protecting the investment of many cryptocurrency investors?