back to article CoinDash crowdfunding hack further dents trust in crypto-trading world

More than $7m was stolen by hackers on Monday from folks investing in a cryptocurrency startup. Israel-based CoinDash – which bills itself as an "an operating system" for "interacting, handling and trading crypto assets" – launched what's called an initial coin offering. This is a process in which people buy virtual tokens …

  1. Throatwarbler Mangrove Silver badge
    Trollface

    Spoiler alert

    These hackers have all been hired by large banking conglomerates to discredit cryptocurrencies. This activity is certainly not an indicator of inherent flaws in trusting your money to fledgling startup operators.

    1. Anonymous Coward
      Anonymous Coward

      Re: Spoiler alert

      I see your joke and raise you one conspiracy theory.

      The hackers are employed by the banks, hoarding the loot to create artificial scarcity and drive up the value. Maybe this is where John McAfee gets the idea that Bitcoin could rise to $500,000.

      1. Anonymous Coward
        Anonymous Coward

        Re: Spoiler alert

        You jest about bitcoin price. You jest sir.

        However I, sat on my throne of skulls in the castle of pain over the river of blood, am hodling.

        Seriously though, billions has gone into Bitcoin. It's not too big to fail but is big enough for a lot of incredibly smart people to take it very seriously.

        1. Sorry that handle is already taken. Silver badge

          Re: Spoiler alert

          It's not too big to fail but is big enough for a lot of incredibly smart people to take it very seriously.

          Yeah, those guys are the scammers.

        2. Anonymous Coward
          Anonymous Coward

          Re: Spoiler alert

          and an even bigger lot of incredibly stupid people as well.

          1. Anonymous Coward
            Anonymous Coward

            Re: Spoiler alert

            "and an even bigger lot of incredibly stupid people as well."

            That is a universal truth and not limited to Bitcoin. You sir, are part of your own vague statement.

        3. mwnci

          Re: Spoiler alert

          It's also a massive risk, at least with gilts you can tie it back to a Country and it's Tax base, politics, stability and relative risk, there is an accountable authority that issues the currency.

          What have you got with BitCoin? No clarity at all, Satoshi Nakamoto, no one can even ID this entity, in any verifiable way? Is the person even alive, did they even exist? Is it a group or collective group, who can move the Genesis block and provide the proof? Is it a giant honey pot, to track and monitor nefarious activity on the Dark Net? For christ's sake it came off the back of "Magic; the Gathering Online Exchange" MTGOX - Nothing about Bitcoin makes any sense from a investment standpoint, and even banks are reticent to use it when you explain it to them, they just look at you slightly befuddled. Believe me, I've presented Bitcoin to C-Levels execs, they get the CBC side, but they are literally are like "Why would you allow something of no intrinsic value, with no guarantor on the back of it, to be a medium of exchange where we could end up wearing the losses of an eco-system, that nobody really understands how or why it was built?"

          I wouldn't trust anything with such a nebulous and obfuscated past.

          1. Anonymous Coward
            Anonymous Coward

            Re: Spoiler alert

            "I wouldn't trust anything with such a nebulous and obfuscated past."

            Like the Rothschilds?

  2. JimmyPage Silver badge
    Facepalm

    victims ... will be compensated in CoinDash tokens

    er ?

  3. jrd

    Like all Ponzi schemes, the digital currencies all suffer from the same problem - early adaptors are the ones who make all the money if it's successful. So why not just start your own digital currency, rather than paying to join someone else's? According to Wikipedia: "There were more than 900 cryptocurrencies available over the internet as of 11 July 2017 and growing".

    1. Mahhn

      "why not just start your own digital currency"

      I think over 900 people did :)

      1. The Nazz

        Nom de plumes

        And how many of the 900+ were started by Satoshi under further non-de-plumes?

  4. hellwig

    So...

    With the whole blockchain being incorruptible, can't everyone just agree not to accept the stolen currency?

    This reminds me of the HAWAII dollars the U.S. printed during WWII. The theory being that if the Axis powers overran Hawaii, the U.S. could just instantly devalue the money.

    Can't crypto-currency do the same? I suppose that would require a central governing body though.

    1. Anonymous Coward
      Anonymous Coward

      Re: So...

      > With the whole blockchain being incorruptible, can't everyone just agree not to accept the stolen currency?

      From my reading of the article, they did not steal the "crypto" currency. They stole the plain old currency that people were sending in exchange for zeroes and ones.

      1. MonkeyCee

        Re: So...

        Nah, they stole the ETH being used to buy CoinDash's tokens.

        That's why it's an ICO, innit :)

        Instead of selling shares for cash (IPO), which involves all this awkward filling in of forms, using bank accounts, having a viable business plan and nasty tax stuff etc, you sell your "totally-not-a-financial-product" in exchange for crypto, neatly bypassing the SEC and the like.

        It's one of the reasons crypto is under a lot of selling pressure, as those startups are busy running away with the cash *ahem* I mean dutifully cashing out a responsible amount in order to pay the bills for their totally profit making business.

        1. Anonymous Coward
          Anonymous Coward

          Re: So...

          > Nah, they stole the ETH being used to buy CoinDash's tokens.

          So you pay for the tokens with networking cable? Both Cat 5 and Cat 6 accepted?

          Either that or I have no idea what you are referring to by ETH. To me it's a Swiss polytechnic school. :-(

    2. Robert Carnegie Silver badge

      Re: So...

      I remember one of the short novels for children about the brilliant detective Agaton Sax, who usually used to be called in to help Scotland Yard. To foil a plot to steal money being transported by train, Agaton Sax got the Bank of England to print fake banknotes that were Identical in every respect to real ones, which were to be stolen. Only afterwards did the flaw in this method occur to him. They -were- real ones, and the Bank of England had issued them.

    3. mwnci

      Re: So...

      Nope the problem is one of integrity...Bitcoins are legitimate, the fact they are used for illegitimate purposes does not or should not invalidate them.

      For example with CASH, if someone steals £1000, and then spends some of it, and then I walk into the same shop an hour later, and get some change, I might end up with a £10 that was stolen. It's still legitimate currency, there is no way to tell? So as it is a "Proper" £10 note it must be honoured, or else all currency issued is illegitimate. Look at a £10, It's a promissory note - "I promise to the pay the Bearer £10 sterling".

      With Bitcoin you actually can trace the currency via the Ledger, so can trace it....But the problem is, it's legitimate currency too, like Cash. So if you accept payment via Bitcoin, then the currency gets "FORKED" your legitimate currency just disappeared......

      Imagine if you with-drew £30 and then one of your £10 notes, just faded into nothingness leaving £20.

      This is the issue with forking Crypto-currency - its an ethical problem, if you restore the currency from the theft, you destroy the integrity of the currency system. That said, Bitcoin is a commodity, so go figure...

      1. hellwig

        Re: So...

        Agreed, it's an ethical problem, but not entirely.

        There are laws on accepting stolen goods (pawn shops have to report everything they buy, and if it turns out to be stolen, they have to give it up, it's their loss). Crypto currency, being a commodity not a currency, could be viewed in a similar manner could it not? So even if the currency community refuses to act, couldn't local governments? I imagine there's at least one ambitions D.A. would wouldn't mind confiscating some Etherium if the blockchain proves it came from illegal activity?

        I view stolen cryptocurrency with a blockchain as accepting cash covered in blood. The police WILL confiscate blood-soaked cash as evidence, and good luck getting it back later. Legal currency, commodity, or other, accepting something you know was involved in a crime is not generally a good idea.

        Of course, even large, legitimate banks knowingly accept and launder all sorts of illegal funds (drug lords, al qaeda, etc...), but they're banks. People aren't treated so kindly in the eyes of the law.

        But of course IANAL.

  5. Anonymous Coward
    Anonymous Coward

    In a moment of tautological irrefutability

    On the subject of an attack where a cyptocurrency trading system fell prey to attackers, Mr Kyle Wilhoit, senior security researcher at DomainTools, said "I think this type of attack goes to show even cryptocurrency trading systems can fall prey to attackers."

    1. Sorry that handle is already taken. Silver badge

      Re: In a moment of tautological irrefutability

      The brief history of cryptocurrency indicates that the probability that XYZ cryptocurrency trading system will fall prey to hackers (or "hackers" as the case may be) tends towards 1 very quickly.

      They tend to be set up/run by amateurs, cowboys and/or scammers.

      1. I ain't Spartacus Gold badge
        Happy

        Re: In a moment of tautological irrefutability

        I've come to the conclusion that all school children should be forced to play EVE Online. Firstly, it might *ahem* improve the quality of "witty" repartee on some of the forums - but more importantly all the kids would get a nice lesson in why cryptocurrency is going to go horribly wrong. If not for them, then for someone else. And of course it might be them next time.

        You can learn a lot about humanity on EVE. Not all of it good. For example, you might learn how to set up your own cryptocurrency, and be the one doing the stealing...

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