Security Experts:

Connect with us

Hi, what are you looking for?

SecurityWeekSecurityWeek

Cybercrime

Bug Allowed Theft of Over $400,000 in Zcoins

An implementation bug has allowed someone to make a profit of more than $400,000 after creating roughly 370,000 units of the Zcoin cryptocurrency, users were told on Friday.

An implementation bug has allowed someone to make a profit of more than $400,000 after creating roughly 370,000 units of the Zcoin cryptocurrency, users were told on Friday.

Zcoin (XZC), worth approximately $2 per unit, is an implementation of the Zerocoin protocol, which aims to provide fully anonymous currency transactions. Zerocoin has also been used to create a new protocol called Zerocash and the ZCash digital currency.

A typo in the code allowed an attacker to fraudulently obtain Zcoins. They managed to create roughly 370,000 coins and sold a majority of it for a profit of approximately 410 bitcoins ($435,000).Zcoin

Zcoin representatives pointed out that the exploit was possible due to a bug in the code and not a cryptographic weakness, and that the anonymity provided by Zerocoin has not been compromised. Zcoin said the damage was “mostly absorbed by the markets.”

“From what we can see, the attacker (or attackers) is very sophisticated and from our investigations, he (or she) did many things to camouflage his tracks through the generation of lots of exchange accounts and carefully spread out deposits and withdrawals over several weeks,” said Zcoin’s Reuben Yap.

Ian Miers, one of the founders of ZCash, has provided a likely explanation for what went wrong. Miers believes it was probably a bug that resulted from copying and pasting code.

The bug was addressed over the weekend and pools and exchanges have been instructed to update their code. Zcoin said no coins will be forfeited or blacklisted, despite the severity of the hack.

Incidents involving cryptocurrencies are not uncommon. In June 2016, the value of the Ethereum digital currency plummeted after someone exploited a vulnerability in the DAO.

Related Reading: Hardware Bitcoin Wallet KeepKey Informs Users of Breach

Related Reading: Keylogger, Bitcoin Stealer Dropped via Fake Bank Transfer Emails

Related Reading: Bitcoin.org Warns of Possible State-Sponsored Attacks

Written By

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.

Click to comment

Daily Briefing Newsletter

Subscribe to the SecurityWeek Email Briefing to stay informed on the latest threats, trends, and technology, along with insightful columns from industry experts.

Expert Insights

Related Content

Cybercrime

Zendesk is informing customers about a data breach that started with an SMS phishing campaign targeting the company’s employees.

Cybercrime

The release of OpenAI’s ChatGPT in late 2022 has demonstrated the potential of AI for both good and bad.

Data Breaches

GoTo said an unidentified threat actor stole encrypted backups and an encryption key for a portion of that data during a 2022 breach.

Cybercrime

The FBI dismantled the network of the prolific Hive ransomware gang and seized infrastructure in Los Angeles that was used for the operation.

Cybercrime

A new study by McAfee and the Center for Strategic and International Studies (CSIS) named a staggering figure as the true annual cost of...

Cybercrime

CISA, NSA, and MS-ISAC issued an alert on the malicious use of RMM software to steal money from bank accounts.

Cybercrime

A recently disclosed vBulletin vulnerability, which had a zero-day status for roughly two days last week, was exploited in a hacker attack targeting the...

Application Security

PayPal is alerting roughly 35,000 individuals that their accounts have been targeted in a credential stuffing campaign.