The cryptocurrency ICO world received another nasty surprise yesterday when it was learned the Enigma pre-ICO had been hacked. Assailants successfully modified the page for the project’s pre-ICO offering and changed the deposit address. Quite a lot of funds were sent to this wrong address, eventually adding up to approximately 1,500 Ether. It now appears those funds were successfully moved to the Bitfinex exchange, where they will be dumped on the markets.
Stolen Enigma Pre-ICO Funds Land on Bitfinex
It is neither the first nor the last time we will hear of a cryptocurrency ICO hack. Criminals are purposefully targeting these projects because they attract a lot of novice investors. Every ICO project has its own web page, which contains deposit addresses for both the main ICO and the pre-ICO. These web pages are a massive security risk for all parties involved, as they are often prone to hacking attempts and other forms of modification behind the scenes.
In the case of the Enigma ICO, the team was alerted to a change of the pre-ICO Ethereum deposit address. That was pretty surprising, considering the official pre-ICO had not even started at the time. As it turned out, someone had successfully gained access to the website’s server and modified some of its pages without the team noticing until it was too late. Despite various alerts on social media, people kept sending funds to the hacker’s address.
When everything was said and done, the fake address had received over 1,500 Ether, over US$500,000 worth. It looks as if all that money currently resides on the Bitfinex exchange, as an transfer was initiated 21 hours before the time of writing. It is unclear if Bitfinex is aware of the situation and plans to take action against this user.
Looking at the Bitfinex chart, the Ether/USD price crashed hard around the time this transfer hit the exchange and generated sufficient confirmations. Then again, Ethereum seems to be in a bit of a downward spiral right now, indicating this could have been a mere coincidence. No one doubts this currency will be sold on the Bitfinex exchange unless the company steps in. After all, half a million dollars is quite a lot of money to fall into the wrong hands. All of this goes to show cryptocurrency ICOs are a big problem for the ecosystem as a whole, and we may see similar thefts in the future.
Not too long ago, a similar incident affected the InsureX ICO. A hacker successfully modified their website and changed the deposit address for Ethereum investments. It is a bit strange to see projects that focus on decentralization relying on centralized website platforms and failing to take the proper precautions when it comes to protecting their web pages. It is unclear how these problems can be solved, though. Using social media to spread the word to users will not work either, as those channels are often targeted by criminals as well.
Investors must always do their due diligence before making financial contributions to projects of any kind. Everyone hopes to see a tenfold return or better on their investment. Partaking in a pre-ICO is one’s best bet for quick results. However, it is this type of greed that criminals are actively targeting these days. Unfortunately, their attempts have been rather successful so far and it does not appear that situation will change anytime soon.