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November 8, 2017

Ethereum bug locks $280 million of cryptocurrency in owners’ accounts

by John_A

The operator of one of the largest collections of wallets for cryptocurrencies, Parity Technologies Ltd., has been hit with a bug that has left a million Ether (ETH) inaccessible to users. That works out to around $280 million at the time of writing.

Of all the cryptocurrencies released in the years since Bitcoin’s popularity began to spike, Ethereum and its “fuel,” Ether, has proved to be one of the most popular and impactful. Unfortunately, just like other currencies, it’s not without its problems. That latest is a bug with multi-signature wallets, that require multiple-user approval to sign a transaction.

Although those sorts of accounts and transactions are designed to be more secure and allow for decentralized escrow payments, a bug allowed someone to become part of every multi-signature wallet that was created since July 20. That means that without that person’s approval, none of the currency can be transferred out of affected wallets, locking up hundreds of millions of dollars of cryptocurrency

Fortunately the bug ‘only’ affected those new wallets, but considering that many wallets were recently created to take advantage of the new Parity Wallet library system deployed on that date, its reach has proved to be broad and deep.

It does appear though, that the bug was not triggered maliciously. As Parity itself explained in a blog post, the problem was exacerbated when the person who triggered the bug went ahead and “suicided” the wallet which had a controlling stake in so many, leaving the currencies effectively frozen.

While Parity claims to still be investigating the issue with no timeframe of if or when the bug may be fixed, Ars dug up what appears to be a conversation with the person responsible for causing the problem in the first place. They claim to be relatively new to Ethereum and made the mistake without knowing what they were doing.

If you’re excited by the recent uptick in value of Bitcoin and other currencies and are considering investing, make sure to do your reading first so you know what you’re getting into. Our beginner’s guide to buying Bitcoin would be a good place to start.

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