VeChain Foundation Hacked - $6,6M Stolen

December 23, 2019   VeChain

Hackers have long been the scourge of the cryptocurrency industry. In 2019 alone, there have been some significant acts of theft, the most notable of which were the Binance hack, which occurred on May 7 and cost the prominent exchange platform $40.7 million. On July 12, BitPoint suffered a major attack, which affected as many as 50 thousand users and left the exchange wallets short of $28 million. The most recent one, and arguably the biggest, happened on November 26, when the rogue transaction took place, which had set UpBit back by 342,00 ETH or $49 million.

$6.6 million in VET taken


But the hackers’ attempts to cash in on the breaches in defense architecture, devised by crypto companies, didn’t end there. A few days ago, the news emerged that the VeChain Foundation, a blockchain enterprise domiciled in Singapore, which stood behind the creation of VET cryptocurrency that is currently ranked 28th on Coinmarketcap, has had its wallet compromised by an unknown hacker or a group of cybercriminals. The wallet contained funds that were allocated for the buyback program. As a result of this malicious act, 1.1 billion VET had been stolen, which amounts to roughly $6,6 million as per the price of VET at the time of the event.

The VeChain Foundation was hesitant to respond to inquiries about the massive cryptocurrency theft, probably due to the internal investigation that took place at that time. But shortly after, the company released a statement, which cleared up the situation.

Incompetence which led to the massive loss


As per the statement, the loss of VET happened not because of hacker’s deliberate attack of VeChain’s wallet, but primarily because of a human error. Allegedly, a member of VeChain Foundation staff had made a mistake when he or she was dealing with the private key, which opened the gateway for the malevolent intruders. The negligent mistake had been made back at the time of the wallet creation, but the Foundation has faced the consequences only now.

All in all, the theft of the aforementioned amount of VET became possible because the hackers had laid their hands on the private key assigned to the buyback address of the said wallet at the date of its launch. This could have happened due to either incompetence of the staff member, whose name was not disclosed, or as the result of a conspiracy to commit this crime.

Detected and tracked


The representatives of the VeChain Foundation assured that their investigation team had detected a single private address (0xD802A148f38aBa4759879c33E8d04deb00cFB92b) to which the funds had been transferred immediately after the wallet hack. Basically, the funds are now pinned down to this address and the company monitors it continuously via VeChainStats, and will be alerted in case the coins get on the move.

As for the integrity of the buyback wallet and the VeChainThor network in general, the company asked the unnerved users to rest assured that they remain fully functional and secured, with additional measures being taken following the hack. The company also requested assistance from Hacken and several well-regarded whitehat hackers, and also notified the Singaporean authorities. 

Author: Alex Paulson for Crypto-Rating.com
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