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Hacker Steals $30 Million in Ethereum from Parity Wallets

A hacker was allegedly able to exploit a vulnerability in Ethereum wallet client Parity and steal over $30 million worth of crypto-currency.

A hacker was allegedly able to exploit a vulnerability in Ethereum wallet client Parity and steal over $30 million worth of crypto-currency.

Because of a security flaw in the Parity Ethereum client, the hacker managed to steal 153,000 Ether from multi-sig wallets created with Parity clients 1.5. Parity has issued a security alert, but updated it today to reveal that the vulnerability has been already resolved.

According to the company, the vulnerability was discovered in “Parity Wallet’s variant of the standard multi-sig contract” and affects all users “with assets in a multi-sig wallet created in Parity Wallet prior to 19/07/17 23:14:56 CEST.”

Prior to releasing the fix, Parity suggested users should “immediately move assets contained in the multi-sig wallet to a secure address.”

In fact, it appears that a group of security researchers and members of the Ethereum Project decided help moving the crypto-currency from the vulnerable wallets and took matter into their own hands by exploiting the same vulnerability to drain as many multi-sig wallets as possible.

“White Hat Group(s) were made aware of a vulnerability in a specific version of a commonly used multisig contract. This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multisig they could find as quickly as possible. Thank you to the greater Ethereum Community that helped finding these vulnerable contracts,” the group notes on their account.

The group managed to drain over 377,116 Ether to their wallet, which is worth over $75 million. They also note that affected users will be refunded as soon as a secure multi sig wallet is created for them.

“If you hold a multisig contract that was drained, please be patient. They will be creating another multisig for you that has the same settings as your old multisig but with the vulnerability removed and will return your funds to you there,” the group says.

The hacker, on the other hand, has already started to move the stolen assets from the initial Ethereum wallet. 70,000 Ether, worth around $14 million, was already moved to seven different wallets, each containing 10,000 Ether now. 

Ethereum’s value dropped from around $230 at around $200 following the hack.

Earlier this week, an unknown actor managed to hack the CoinDash official website during the company’s Token Sale and stole $7 million in Ethereum by replacing the company’s legitimate address with their own.

In early July, hackers managed to hijack a computer belonging to an employee of Bithumb, one of the world’s largest cryptocurrency exchanges, and stole significant amounts of Bitcoin and Ethereum.

“This latest incident has serious ramifications. In fact, ETH price has actually taken a dip, and is likely due to the uncertainty around this breach. Hackers exploited a vulnerability in multi-sig wallets from Parity – drastically different from the ICO CoinDash hack that happened earlier this week,” Tyler Moffitt, Senior Threat Research Analyst at cybersecurity firm Webroot, told SecurityWeek in an emailed comment.

Last year, a hack on the Ethereum holdings of DAO (a decentralized and virtual organization designed to provide funds for new projects) also resulted in a drop in the digital currency’s value.

“The key takeaway from this hack is that we’re still exploring the Ethereum space and wallet security is more important than ever. As a threat researcher, I personally recommend hardware or native wallets (desktop wallets); they are the most secure, as you are in control of any transaction. Do NOT store lots of currency in exchanges that control your private address. Only use them to make trades then back out to safe addresses,” Moffitt concluded.

Related: Hacker Steals $7 Million in Ethereum From CoinDash

Related: Bitcoin, Ethereum Stolen Following Bithumb Hack

Written By

Ionut Arghire is an international correspondent for SecurityWeek.

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