The Bancor decentralized crypto token exchange has been temporarily disabled on Monday after the team notified the community of a “security breach” involving over $12 million USD worth of three popular cryptocurrencies: Ethereum (ETH), Pundi X (NPXS), and Bancor Network Token (BNT).
At 13:15 PM (PT) on Monday, the Swiss-based Bancor took to Twitter to update users on the latest news regarding the major hacking incident that took place around 17:00 on Sunday.
Here is the latest update on the recent security breach: pic.twitter.com/JroypFvBri
— Bancor (@Bancor) July 9, 2018
This informative tweet proceeded an earlier one (i.e., at 3:56 AM) where Bancor first declared that their decentralized liquidity network – one of the most widely-used decentralized crypto exchanges – had “experienced a security breach.” Three hours earlier, they announced that the Bancor Web App was “down for maintenance.”
So, What Happened to Bancor?
Whilst Bancor divulged that “details of the breach are still being investigated,” they did confirm several facts regarding which cryptocurrencies were caught up in the hacking incident.
In total, three cryptocurrencies – each ranked in the top-hundred via market cap – were involved: 24,984 ETH (~$12.5 million), 229,356,645 NPXS (~$1 million), and 3,200,000 BNT (~$10 million). However, the latter was able to be frozen by the Bancor team thanks to an in-built mechanism of Bancor Protocol that “effectively stop[ped] the thief from running away with the stolen tokens.”
As to how this cyber-heist occurred, Bancor revealed that a wallet being used to “upgrade some smart contracts was compromised.” This digital wallet was then used to withdraw the aforementioned tokens of Ethereum, Pundi X, and Bancor Protocol.
Are Funds Safu?
Later on Monday afternoon, Bancor issued another tweet ensuring that user funds have not been “compromised in the attack.” This is because the Swiss decentralized trading platform does not hold any cryptocurrency on behalf of their users – as opposed to a centralized exchange such as Binance or Huobi Pro.
Bancor’s BNT Dives
From when Bancor suggested the hack occurred (i.e., 17:00 on Sunday), the USD value of Bancor Network Token slumped by as much as ~36 percent from $3.14 to $2.00 over a fourteen-hour period, according to TradingView. BNT has recovered by ~20 percent since this daily low, at the time of writing.
Beyond concerns with Bancor’s security practices, the heavy BNT sell-off is likely due to the elements of centralization investors have seen deployed by a network widely considered decentralized.
Image From Shutterstock