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Bancor statement on $23.5 million hack: customer wallets were not compromised

11 Jul, 2018
by Jelmer van der Dussen
News
Bancor statement on $23.5 million hack: customer wallets were not compromised

Decentralized crypto trading platform Bancor has today released a statement on the hack of $23.5 million earlier this week. In the hack, $12.5 million worth of Ethereum, $1 million worth of NPXS and $10 million worth of Bancor's BNT was stolen.

In the statement released on Wednesday, Bancor shares more details on the hack. The platform states no customer wallets were broken into. All the Ether that was stolen, was taken from BNT's connector balance, which functions as a kind of reserve. The other tokens that were stolen came from smart contracts 'that the breached wallet had access to on the network'.

Bancor tries to explain this further in their statement: 'By sending the smart contract ETH, new BNT tokens are issued and ETH is stored in a connected balance. When BNT is sent back to the smart contract, the BNT tokens are destroyed and a proportional amount of ETH is removed from the token's connected balance and sent to the seller'. These processes in the smart contract are activated when buying and selling BNT.

Bancor adds that the BNT tokens that were stolen in the hack are now frozen. This raised questions about the 'decentralization' of the platform. Bancor addresses those concerns. 'We firmly believe that this ability (to freeze tokens) is a preventative measure essential to most tokens and necessary to protect the network and token holders in a state of emergency.'

Bancor continues by stating that 'at Bancor's inception we made the strategic decision to learn from past incidents that brought down trailblazing companies before us. We set a 3 year pilot period with certain safety measures to protect our communities as we build new tech in an emerging ecosystem.'

The BNT token lost close to 30% of its value since the hack and is now traded at $2.28.

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