EtherDelta Fell Victim To Phishing Attack

EtherDelta Fell Victim To Phishing Attack

Unless you are living under the rocks, you have probably heard that EtherDelta had fallen victim to a phishing attack. The exchange website had its DNS server compromised. Therefore, the bad guys managed to run away with $244,000 worth of 305 ETH coins. Also, ERC20 tokens were stolen.

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Unless you are living under the rocks, you have probably heard that EtherDelta had fallen victim to a phishing attack. The exchange website had its DNS server compromised. Therefore, the bad guys managed to run away with $244,000 worth of 305 ETH coins. Also, ERC20 tokens were stolen.

Unfortunately, this is not the first case of cryptocoin market being successfully attacked. Earlier this year Bithumb and Youbit lost millions of won and 17% of the total funds respectively. Thankfully, EtherDelta managed to get away with less damage, due to its decentralized system and the smart contracts, which customers use.

Generally, exchanges like Binance, Bithumb, Bittrex and similar, operate through a centralized system. In that scenario users delegate the management of their private keys to the exchange, hence all operations are distributed on an IOU basis. Furthermore, users do not hold their funds until they withdraw them from the exchange. This is why centralized exchanges are vulnerable to attacks and the risks are higher.

On EtherDelta, however, everything is distributed among peers, and the stock itself does not take hold of any funds, it only serves as a platform for trading. In the peer-to-peer network, everyone is responsible for his or her keys. Keys are imported either manually or through synchronizing browser wallets like Meta Mask or Ledger Nano S with EtherDelta. Later, Ethereum-powered smart contracts are used for the user keys’ management.

Since EtherDelta is decentralized and stores no private information, the hackers were forced to find another way to put their hands on individual keys. They had lured users to a scam website by redirecting the exchange traffic. Fortunately, only customers who logged in the malicious website lost their funds, because others’ were protected by smart contracts.

The recent attack on EtherDelta should ring a bell to the team behind it. Despite the decentralization and smart contracts, it is already proven the system is not incorruptible. They should take immediate measures towards improving its security. However, it is advisable everyone remains cautious when trading or operating with cryptocurrencies. If you happen to see something, which seems strange or out of place, instantly contact the service team.

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