CoinDash, a blockchain startup focusing on cryptocurrency social trading and portfolio management platforms, was scheduled to begin its ICO on July 17, 2017. The very same morning, it sent out an urgent warning to investors regarding alleged hacking of its cyber security. The e-trade for blockchain was hacked on Monday and $7.4 million was stolen from investors trying to participate in CoinDash ICO.
CoinDash ICO went terribly wrong
The unknown hacker stole $7.4 million worth of Ethereum in just under three minutes. At the time of the CoinDash ICO, the e-trade for blockchain posted a string of characters which represented its wallet address for investors. Apparently, the hacker tricked users by replacing the official Ethereum address to a fraudulent Ethereum address on the compromised website. Early participants then sent ETH to the fraudulent Ethereum address rather than the CoinDash’s official address.
The hacker’s address was tracked down on Etherscan. It also showed the amount of stolen ether to be worth $7.4 million USD.
CoinDash has now left a warning on its token funding page advising investors to stop sending funds. Its funding page reads:
“This is an emergency message delivered to you in order to stop you from sending your money to an unauthorized ETH address. It seems like our Token Sale page was tampered and the sending address was changed. Please stop from sending your funds to any of the addresses until we say otherwise. We are currently examining the situation and will shortly send further instructions.”
In the meantime, it has also terminated the coin sales and is currently investigating the issue. The only uplifting news is that investors who sent Ethereum to the fraudulent address will also receive their intended CoinDash tokens.
The Token Sale is done, do not send any ETH to any address. Official statement regarding the hack will be released soon.
— CoinDash.io (@coindashio) July 17, 2017
CoinDash ICO was scheduled to last 28 days or until it reached a $12 million limit. The platform said it raised $6.4 million from keen investors. A rapid surge in prices of coins of Ethereum, around $300 from $8 at the start of the year. This surge had caught the fancy of many investors. According to Coinmarketcap.com, Ether (ETH) traded at $174.88 on Monday.
One Reddit user had informed CoinDash about their slack three days before the ICO. It looks like CoinDash chose to take it lightly or not acknowledge it at all.
Meanwhile, skeptical investors now believe that the people behind the project are scammers. This is probably because CoinDash didn’t actually whitelist their solidity code before the ICO. Investors have every reason to draw suspicion on CoinDash and its founders. Alon Muroch, the CEO and co-founder of CoinDash, was a lead developer for an old company Getgems which has an ICO and scammed $1 million from initial investors.
