On July 17th, something went very wrong during CoinDash’s Initial Coin Offering (ICO). After only three minutes of going live, company’s employees found out they’d been hacked.
CoinDash is a company that trades Ether, the popular cryptocurrency which is also the so-called money unit of the Ethereum platform. On July 17th, the company was ready to start another big fundraising event where the investors could get their chance to invest in CoinDash with Ether. This is a common practice comparable with an IPO, where you buy into a company, get tokens (think of them as stocks to some measure) and hope to make money off it in the future.
This didn’t really work out on that particular day.
What seems to happen is that a hacker succeeded to change the Ethereum wallet address on the CoinDash’s website just as the fundraising was about to begin. This would make the cryptocurrency that was supposed to get to CoinDash’s account go directly to the attacker.
The company gave an official explanation on their site later on. They have suffered a hacking attack, the company said, and $7 million dollars were stolen in the process by a hacker still unknown to them.
It took CoinDash no more than three minutes in the fundraising event to discover the hack, but it was already too late. The information came from the CoinDash Slack channel, whose screenshot of the tweet has been posted on Reddit and confirmed true by Motherboard.
Website has been hacked.
— CoinDash.io (@coindashio) July 17, 2017
People quickly got on Reddit in order to vent their anger and frustration over the fact they’ve been scammed, quick to speculate that this could be an inside job.
One Reddit user couldn’t find any proof of the hack actually happening and pointed out that this would be a good scenario for the company to get away with free ETH. Another concluded that the situation was set up from the beginning.
Thankfully, there is still hope for those whose Ether went into the hacker’s wallet. According to CoinDash, the company will still issue tokens to anyone who’s fallen a victim of the hack, if it happened before the company shut the site down as soon as they discovered hacking.
The company wrote on their site that they’re responsible for all of its contributors and is working on sending Coindash Tokens equal to the money that was contributed.
What could be the CoinDash’s saving grace is the fact that the company successfully raised $6.4 million from what they call their early contributors and whitelist participants before everything went wrong.
Meanwhile, the stolen Ether is waiting for collection in a wallet. There are slim chances of finding out who was the persecutor of the hack since it’s commonly known how difficult it can be to follow stolen cryptocurrency.