An unidentified hacker has exploited a small error in the coding language of Zcoin to steal $400,000. Zcoin uses a proprietary software called Zerocoin and it is believed that a small typographical error in a single line of code is all it took for the hacker to steal the money from the company.
According to an official announcement made by Zcoin, the error has been attributed to a human mistake during the process of coding.
‘It appears that one of our employees made a small mistake and a hacker managed to take advantage of the mistake and steal the coins from our system, the company said.
Zcoin operates in a manner that is similar to Bitcoin. The company uses highly sophisticated cryptography processes to anonymize the financial transactions of its customers. Clients who trade in Zcoins assume a level of anonymity that it similar to that of Bitcoin users.
According to Reuben Yap, the Zerocoin community manager, it is not clear how the unidentified hacker managed to take advantage of the error. However, he added that the company had identified a bug in its coin which, it is believed, the hacker took advantage of to create additional transactions in the system of the company.
‘We have identified a bug in our system that resulted from an erroneous addition of a single character in the line of code,’ he wrote.
It has emerged that the additional character was a result of human error.
Further reports indicate that after the hacker had managed to access the zcoins, he cleverly avoided detection by spreading the transactions over an extended period of time.
In practice, companies operating cryptocurrencies can collaborate to track down lost coins. However, the success of the collaboration efforts largely depends on how careless the person trading in stolen coins is. In the past, hackers have devised an effective method of trading in stolen coins by spreading their transactions over a long period of time. Some hackers cleverly spread their transactions on multiple cryptocurrency platforms, thus making it difficult for companies like Bitcoin and Zcoin to successfully track down lost coins.
Zcoin has admitted that much of the money that the hacker stole has been already absorbed by the market. This recent news means that it is now almost impossible to detect the transactions or even identify the person behind the hacking.