Hack of initial coin offerings leads to loss of millions in cryptocurrency

News by Doug Olenick

Initial coin offerings (ICO) are losing about 10 percent of all ICO funds generated to cyber-attack due to poor cyber-security as malicious actors take advantage of the absence of a centralised authority.

Initial coin offerings (ICO) are losing about 10 percent of all ICO funds generated to cyber-attack due to poor cyber-security as malicious actors take advantage of the absence of a centralised authority, blockchain transaction irreversibility and information chaos that presides over this sector.

An Enst & Young report found that of the US$3.7 billion (£2.6 billion) generated by ICOs so far, about 10 percent has been stolen primarily through phishing, DDoS and general hacking attacks. Successful attacks allow the malicious actors to substitute wallet addresses, access private keys, steal funds from wallets and taking funds from exchanges.

An ICO is an unregulated means by which funds are raised for a new cryptocurrency venture, according to Investopedia.

In addition to the financial loss, Enst & Young noted that the victim's personal information is also exposed and their reputation damaged during these incidents.

The reason for this high level of success was attributed to the ICO project leader's lack of concern regarding cyber-security.

“Project founders focus on attracting investors and security is often not prioritised. Hackers successfully take advantage – the more hyped and large-scale the ICO, the more attractive it is for attacks,” the report said.

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