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Reggie Middleton, CEO, Veritaseum

Ethereum ICO Hacked for $8.4 Million

Blockchain, Crime, FinTech, ICO News, Investing, News, Uncategorized | July 24, 2017 By:

New York-based Veritaseum has confirmed that a hacker stole tokens worth $8.4 million USD yesterday during its initial coin offering (ICO). The attack marks the second ethereum ICO hack in a week and the fourth known hack attack in the last month on the ethereum platform.

Veritaseum enables software-driven P2P capital markets without brokerages, banks or traditional exchanges. ICO participants were asked to buy VERI tokens for a financial services product that is not yet launched.

Founder Reggie Middleton made users aware of the hack on the platform’s Slack channel, and word quickly spread. Middleton claimed a hacker stole VERI tokes during the ICO and then quickly re-sold them. The funds were initially sent to two ethereum wallets, but quickly siphoned.

Middleton downplayed the hack in a post to a bitcoin forum, calling it “inconsequential” and hinted the blame for the ICO snafu rested with its tech partners. “The hack seemed to be very sophisticated, but there is at least one corporate partner that may have dropped the ball and be liable,” said Middleton. “Well let the lawyers sort hat out, if it goes that far.”

He also claimed the company decided against forking VERI when it discovered the hack.  “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.”

Last week, CoinDash had its ICO hacked after having its address for ethereum funds changed. In another incident, Parity Technologies, run by ethereum co-creator Gavin Wood, has its wallet product hacked, resulting in more than $30 million in ETH vanishing.

At the start of July, a hacker using the web domain Classic Ether Wallet collected log-in credentials and emptied accounts.