According to a recent report by TheNextWeb, Newdex, a decentralized cryptocurrency exchange, was left vulnerable when hackers flooded the exchange with $1 billion worth of fake EOS tokens. The hackers stole almost $58,000 worth of cryptocurrencies directly from the users of Newdex.
The exchange platform has confirmed the hack and stated that an EOS account [oo1122334455] had issued 1 billion fake EOS tokens. They continued to say that after testing the “feasibility of the attack” the hackers started placing larger buy orders. A total of 11,800 fake EOS orders were issued in order to purchase BLACK, IQ and ADD. These tokens were eventually sold by the hackers in exchange for 4028 real EOS tokens. Succeeding which, the real EOS tokens were transferred to Bitfinex, one of the leading cryptocurrency exchange platform around the world.
Reportedly, this incident has resulted in Newdex users losing almost 11,803 worth of EOS tokens. The Newdex team quickly responded to the attack and claimed to have fixed the problem. Irrespective of the Newdex team taking complete responsibility, the exchange platform has not released an official statement regarding the reimbursement of the lost money to their users.
Furthermore, the platform stated that attackers had seriously damaged the “ecological stability of EOS”. Newdex will be working on tracing the attackers and prosecuting them along with providing relevant evidence to settle the EOS dispute.
This attack was successful as the platform was unable to confirm whether the tokens which were pumped into the exchange were real tokens or not. This is because a token can be created by anyone using the EOS framework, even allowing them to name the token ‘EOS’. For this, an individual requries to have an EOS account. Moreover, since the platform does not use smart contracts, there was no base for the platform to verify the authenticity of the tokens.
The Newdex team stated,
“Newdex is a participant in EOS Ecology, and our vision is to give users abetter-decentralized trading experience.”
They further added that despite encountering such difficulties the exchange platform would never forget the intention with which they started and will do the best to provide a better trading experience for Newdex users.
Amoanon, a Redditor said:
“Newdex lied about being a true DEX. So this story doesn’t surprise me one bit. Assume and expect the worst from a project that actively lies to its users.”
Halperwire, another Redditor said:
“How did the DEX not check if the EOS was valid before accepting it? Also, the comment “Newdex expressed our strong condemnation and said the attacker seriously undermined the ecological stability of EOS” makes it sound as if the fault does not fall on Newdex but the EOS platform itself.”
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