Yesterday, just 3 minutes after launching its Initial Coin Offering (ICO), the cryptocurrency trading platform CoinDash was hacked.
$7 Million USD worth of Ethereum was reportedly stolen from CoinDash by an unknown hacker who took over the trading platform’s website–on the same day the company launched its ICO.
ICO is famous in the cryptocurrency environment, and it works almost just the same as IPO. With ICO, startups who wanted to expand would offer coins–instead of shares like in IPO–to participants in exchange for their investments.
Simply put, ICO is a fancy way of raising funds through digital currencies. However, in the case of CoinDash, the experience turned into a total nightmare.#CoinDash hacked. Investors believe they got scammed by the company!Click To Tweet
How CoinDash was Hacked
According to Motherboard, a few minutes after the Initial Coin Offering began, CoinDash announced to its investors that the website has been hacked and that their funds were stolen.
Website has been hacked.
— CoinDash.io (@coindashio) July 17, 2017
Apparently, the attackers seized control of the website and changed the Crowdsale address of where the investors should send their funds. To make matters worst, the action was irreversible, making it impossible to retrieve the stolen funds.
“All we know now is that an outside attacker changed the address right after the sale started,” Ram Avissar, marketing director of CoinDash, told Motherboard. Avissar further added that the company has stopped the Token Sale and is now looking for best ways to compensate the affected individuals.
Following the said hacking incident, the company published an official statement on Slack and Reddit. Part of the statement read:
“CoinDash is responsible to all of its contributors and will send CDTs reflective of each contribution. Contributors that sent ETH to the fraudulent Ethereum address, which was maliciously placed on our website, and sent ETH to the CoinDash.io official address will receive their CDT tokens accordingly. Transactions sent to any fraudulent address after our website was shut down will not be compensated.”
It appears that instead of sharing their wallet code and letting people know what time it would start accepting Ether, CoinDash opted to post the URL to their website that has a standard code to deposit Ethereum. This move from the crew of the company exposed them from all possibilities of hacking.
CoinDash Hacking Just a Hoax?
Right now, information is circulating in different digital currency forums that the hacking incident is just an elaborate attempt at scamming people.
A peek at the popular Bitcoin Talk forum site clearly shows the disdain of people towards CoinDash.
The hacking incident is also a major topic in Reddit. A certain @coinpops posted the following:
The developers of CoinDash are still trying to calm investors. One of the company’s developers said through Slack:
“All CoinDash investors will get their tokens. We are working to solve the situation.”
Upon checking with Etherscan.io, the wallet address of the hacker now holds over 43,400 Ether, amounting to more than $9 million USD.