Parity Technologies Still Seeks Answers On $160 Million ETH Lock-up

News | February 2, 2018 By:

Parity Technologies, the developer of multi-sig wallets for bitcoin and ethereum, is still seeking  a solution to recover frozen ethers accidentally locked-up last year.

In November 2017, Parity lost nearly $160 million worth of ethereum when a novice developer accidentally deleted a code library that made Parity’s wallets work. It claimed that 587 wallets containing 513,774.16 ethers have been blocked. The issue was believed to be a hack at first, but later proved to be an error on the part of the developer.

Last month, Parity said the only way to recover the funds was via a hard fork to the ethereum blockchain, and proposed a number of methods to implement the change. However, Parity has not been able to persuade the ethereum community to comply with a system upgrade.

Among impacted users were several startups and open-source projects that used Parity’s wallet platform to raise funds through initial coin offerings (ICO). Some affected firms are rebuilding and continuing to develop their software as if nothing happened.

The most heavily affected was Web3 Foundation, a nonprofit organization that is in charge of the development of the Polkadot blockchain. Polkadot is also led by Parity founder Gavin Wood, who is also a former Ethereum Foundation CTO.

Polkadot raised $150 million in an ICO last year and is currently having to deal with $98 million-worth of its ether funds being locked up. Web3 Foundation spokesperson Ashley Tyson said in a report that due to the lock-up, plans to deploy bounties designed to fix code weaknesses and grant programs to spur development have been scrapped. She admitted that, at best, plans had to be “massively scaled back.”

Tyson added that Web3 Foundation obviously would like to find some way to recover the funds, but the process for that is still unclear.

A request for comment by Parity Technologies has not acknowledged.