$12.5 million in Ethereum [ETH] stolen after Vitalik Buterin slams centralized exchange platforms

Bancor, a decentralized exchange platform released a press statement stating that their wallet which was used to upgrade some smart contracts was compromised. The security breach occurred at 00:00 UTC on Monday and the wallet was used to withdraw ETH from the BNT smart contract.

Hackers were able to steal a whopping $23.5 million of ETH, NPXS and BNTC.

  • 24,984 ETH [approx. $12.5 million]
  • 229,356,645 NPXS [approx. $1 million]
  • 3,200,000 BNT [approx. $10 million]

The decentralized exchange platform said that they froze the stolen BNT token because of the Bancor protocol, built to recover from a security breach. However, they were unable to freeze ETH and other tokens.

Based on various sources, the CEO of Changelly, Konstantin Gladych stated that a part of the stolen tokens was exchanged through Changelly.

On Twitter, Bancor said:

“This morning (CEST) Bancor experienced a security breach. No user wallets were compromised. To complete the investigation, we have moved to maintenance and will be releasing a more detailed report shortly. We look forward to being back online as soon as possible.”

This comes after Vitalik Buterin, the Founder of Ethereum, bashed centralized exchanges during an interview. He said:

“I definitely hope that centralized exchanges go burn in hell.”

The statement was backed by Bancor on Twitter. They said:

“Burning in hell is a bit extreme, but we do agree with Vitalik Buterin that decentralized solutions- such as Bancor – are the future of Blockchain and value exchange.”

Charlie Lee, the Founder of Litecoin says:

“A Bancor wallet got hacked and that wallet has the ability to steal coins out of their own smart contracts. 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.”

Emin Gun Sirer, a well-known crypto-influencer says:

“This looks like a straightforward case of bad opsec at Bancor, instead of a more worrisome flaw in their core contract.”

Mike Dudas, the Co-Founder of Button says:

“Hackers steal $23.5M from Bancor, which raised $153M in an ICO last year. I’ll stop using major ‘centralized’ exchanges when the ‘decentalized’ ones get their security acts together.”

The investigation on the details of the hack is ongoing and Bancor has stated that they will update on the situation soon. As of now, the platform is working with many exchange platforms in order to trace the stolen funds and make it more difficult to be liquidated.

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