Hackernoon logoEthereum Client Developer “Accidentally” Locks $150 Million of User Funds by@TheCoinEconomy

Ethereum Client Developer “Accidentally” Locks $150 Million of User Funds

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Due to a security vulnerability within Parity’s code — one of the largest Ethereum clients — over $150 million worth of user funds have been frozen and are unable to be accessed.

According to an alert issued by Parity Technologies yesterday (November 7th), the vulnerability was discovered within the standard multi-signature (multi-sig) wallet update that was deployed on July 20th (A wallet multi-sig feature increases security by requiring more than one key to initiate and broadcast Ethereum transactions).

The vulnerability itself was discovered yesterday by a client developer that goes by the name “devops199,” who “accidentally” deleted a code libarary from the Parity wallet, and then reported it on Github.

In consequence of devops199’s “mistake”, all wallets utilizing the company’s multi-signature function became frozen, leaving thousands of users completely unable to access their funds — an estimated amount of over $152 million.

On top of this, several startups and open-source projects that recently launched initial coin offerings (ICOs) have come forward, claiming that their 151 wallet addresses have been affected by the software failure.

As expected, this event has placed a considerable amount of attention on Parity Technologies, which also lost $30 million of Ether in July due to a hack.

Moreover, it comes at a time when Ethereum itself is receiving a lot of attention for fueling over 10,000 ICO projects, 13 of which raised over $100 million alone.

One of these is Polkadot, which raised over $145 million in their token sale last month. Now, due to the client’s failure, the blockchain startup is dealing with $98 million-worth of its Ether funds being locked away in Parity.

Another ICO startup that is being affected by the wallet’s failure is Iconomi, a digital asset management platform that raised more than $10 million from its token sale in September.

According to Etherscan, an ethereum blockchain explorer, Iconomi’s frozen wallet represents a value of around $34 million. However, the company recently noted in a blog post that the wallet only contains company assets, not customer funds.

The post said:

“All users’ digital assets stored on the platform are completely safe, and the functioning of the platform is unaffected.”

Nonetheless, Parity, while denying the possible solution of forking the blockchain to unlock customer funds, is placing a great amount of effort toward resolving the issue. In fact, on social media, the team has urged those affected to get in contact as soon possible. Additionally, the firm has also created a website dedicated to helping users find out if their wallets were among those affected.

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