Hundreds of Millions of Dollars in Ether Are Frozen

Hundreds of Millions of Dollars in Ether Are Frozen

This week, there was an announcement about a bug in the Parity software of the cryptocurrency Ethereum, which had led to the freezing of hundreds of millions.

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During the course of this week, there was an announcement by news station CCN that there was a bug in the Parity software of the cryptocurrency Ethereum, which had led to the freezing of hundreds of millions of dollars.

Parity’s response

With reports of the bug first popping up on social media, the Parity development team made an official statement, which revealed the following:

On 8 November, the Parity development team said that the bug was as a major security threat and that a large sum of ether from different users storing their assets in multi-sig wallets generated in Parity Wallet, deployed after 20 July, had been frozen and their movement restricted.

They also expressed their regrets that the issue had caused so much problems and much confusion among users. They went on to promise that they would conduct an investigation and explore all possible scenarios, implications, and remedies.

They also stated that even though the estimates on the actual amount of money frozen was still speculative, experts in the field of cryptocurrency said that it could somewhere from $150 to $280 million.

The Bug

One particular user, who said they were a bit new to the world of cryptocurrency, managed to discover a significant flaw in Parity when they took control of a contract containing some sensitive information, some of which highlighted transaction instructions of a huge portion of multi-signature wallets.

The issue arose when the user confirmed themselves as the proprietors of the smart contract and deactivated it shortly after, which in turn effectively disallowed funds from being either accessed or moved.

During an interview with a prominent magazine, Patrick McCorry, who is a researcher at the University College of London working in the field of cryptocurrency said that the only way to restore the funds lost was through a hard fork to reverse the matter.

Tuur Demester, who is a notable bitcoin analyst and investor, made it known that $90 million worth of Ether of an ICO of Gavin Wood was also frozen and that the bug had affected several commercial projects aside from user wallets.

At this stage, it may not be prudent to state that the Parity flaw was a bug or some kind of penetration in Ethereum software, since co-founder Vitalik Buterin has always propelled the development and disbursement of safer and simpler wallet contracts. He also recognized the work being done by developers to offer a secure framework for Ether users.

Where do things go from here?

As late as 2016, Ethereum had done four consecutive hard forks to sort out bugs and memory outages within their software. As a result, it is the hope of most people that the funds have not in fact been stolen, and they will be returned to their respective wallet holders once the issue is resolved.

For those who are not so familiar with the cryptocurrency world, such kinds of vulnerabilities can be sorted out through the implementation of updates. In addition, with a speedy recovery, the Ethereum network will emerge more resilient against such issues in future.

Finally, both Parity and Ethereum are working tirelessly to solve the problem as soon as possible and restore confidence among users of Ether.