This week, the death knell sounded for the U.K based cryptocurrency exchange platform, Cubit. This is as a result of a devastating loss of $32.5 million (€29 million) in a theft by fraudsters in February this year. The management admits that it was the victim of a sophisticated fraudulent scheme which had three of its clients as accomplices.
Cryptocurrency platforms and exchanges have often been the victims of major thefts since their inception. These thefts usually occur in either of these two ways-scams and hacks. Faulty code can and has made applications vulnerable to hacking and malfunctions. Two prime examples include:
- The DAO hack- DAO was an Ethereum ‘dApp’, a flaw in the DAO’s code enabled a hacker to route $55M in ether held by the DAO into an account he owned.
- Parity Wallet Freeze- A flaw in Parity’s code led to several hundred million dollars’ worth of ether being frozen – it hasn’t been stolen but it can’t be accessed either.
Most of the platforms that have been victims tend to find their feet again in a short time after the event. However,this theft seems to have left Cubit particularly devastated as it admits that it “crippled business operations and finally led to the difficult decision to place the company into administration”, to hear them tell it.Despite the situation and its attendant problems, steps are being taken by the management to fix the situation and allay the fears and concerns of its users. It has already issued a statement to the public stating that it is yet to recover from the theft, but is making stringent efforts to do so. Shortly afterwards it released a message from its official account on twitter.