Bancor pledges ‘coalition of crypto defenders’ post-hack

July 13, 2018
Chris Wheal

Bancor website

Bancor’s website following the hack: Shutterstock

Decentralised exchange platform Bancor released a statement on its official blog in response to an attack earlier this week, when attackers targeted $23.5 million in three different cryptocurrencies.

The exchange stated that a thorough investigation is in progress and it will release an updated statement once it completes its analysis of the hack. The hack was first reported on July 10 after the wallet used to upgrade the smart contracts was compromised

Bancor lost Ethereum [ETH], Bancor Network Tokens [BNT] and Pundi X [NPXS], but was able to retrieve BNTs worth $10 million and reduce the overall loss to $13.5 million.

In a blog post, co-founder Guy Benartzi pledged that Bancor’s internal tools that helped tracked its hacked funds would be made available to a wider audience. The move will form a precursor to a major crime-fighting initiative which he hopes will result in contribution of “resources and capabilities to fight criminals together.”

Benartzi described the initiative as a “coalition of crypto defenders,” which would involve the platform and other as yet unnamed cryptocurrency industry businesses.

Emergency mechanism

The emergency mechanism used when the hack was detected refers to the freeze/pause function found in tokens such as EOS [EOS], Tron [TRX], Omisgo [OMG], Augur [REP] and many more. Bancor added that this was the first time the exchange platform made use of this mechanism which protected them from facing further damage and was used to recover the stolen $10 million of stolen.

In addition, the hacked exchange platform offered recommendations. “We encourage all responsible token issuers to follow Bancor’s example in transparently implementing emergency capabilities to protect their communities — and the industry at large — from thieves and criminals,” it stated.

Equally important is the ability of projects to develop upgradeable code which enables them to learn, iterate and more rapidly progress towards mass-market adoption of these important technologies.”

However, Bancor’s critics argue that its ability to freeze a smart contract containing almost $11 million in its native token BNT undermine its claims to be a decentralised service and is contrary to the principles of decentralisation.

They include Charlie Lee, creator of Litecoin, who tweeted, “An exchange is not decentralized if it can lose customer funds OR if it can freeze customer funds. Bancor can do BOTH. It’s a false sense of decentralization.”

 

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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