Trade.io, a Swiss blockchain company that advertises itself as a “next-generation financial institution”, has been hacked.
The tokens are worth $11 mil… no wait… $7.5 million
According to an announcement from the firm, 50 million Trade Tokens (TIO), which is the company’s own cryptocurrency, have been stolen. These are worth approximately $7.5 million at the current price, but closer to $11 million at the time of the hack a few hours ago.
The facts of the announcement are as follows:
1. At 08:40 EST (14:40 GMT), 50 million TIO was transferred from a cold storage wallet belonging to trade.io.
2. 1.3 million TIO (approx. $197,000) was transferred to two exchanges – Kucoin and Bancor – before trade.io requested that those venues freeze TIO transactions.
3. TIO trading is currently suspended on Kucoin and trade.io itself, and the token has been removed from Bancor permanently.
4. The money in the cold wallet was intended for the company’s ‘liquidity pool’.
5. The company is considering a fork to save the money. The decision will be announced tomorrow (Monday).
Interestingly, despite the fact that TIO trading has been suspended on the trade.io exchange, the announcement is entitled: “Important Notice: Only trade TIO on trade.io”.
What is this liquidity pool?
A liquidity pool is basically a common pot of money which is used to back up the trades in a market. In the case of trade.io, the pool is made up with 50 million tokens from the company itself, plus a portion of its revenue. Users are invited to contribute too. According to the company, they make interest from money deposited, and can take it back whenever they want.
The company says that all the functions of this service remain operational.
What is a cold wallet?
A cold wallet is a cryptocurrency wallet which is not connected to the internet, such as a USB drive. That means that it can only be accessed by someone with physical access to the wallet.
Trade.io states: “We use industry recommended cold storage which are maintained in safety deposit boxes in banks, along with all corresponding materials. We have confirmed that the safety deposit boxes were not compromised.”
Introducing NextV - The Full Scope Solution To Building Your Next Virtual EventGo to article >>
Apologies for the inconvenience. We are temporarily closing all trading for TIO because trade io is preparing to fork TIO. Rest assured that your funds are safe. Your kind patience and understanding are highly appreciated. Thank you.
— KuCoin Mod (@KuCoinMod) October 21, 2018
“Those attempting to destroy the movement…”
A fork is a software upgrade of all TIO tokens, which would render the stolen money worthless. Holders of the coin must agree to only use the upgraded version of the token in order for this to work.
The company ends its announcement: “It’s obvious that trade.io is now a major focal point of competitors and those attempting to destroy the movement that is on the ground floor, and we guarantee you we will not bow down to their actions. We have the strongest community in crypto and we assure you we will wind up stronger as a result of actions like these and any such attacks in the future.”
Some background on the company
The goal of the Zug-based company is to open a multi-asset decentralised exchange which handles cryptocurrency, fiat currency, and financial derivatives based on physical commodities.
The company raised approximately $51 million during its pre-sale and ICO and in late 2017, and its token appeared on the price listing site coinmarketcap.com in January 2018. It had initially aimed to raise $135 million.
Its cryptocurrency exchange was launched in late July.
It has signed a number of partnerships during its eleven months of existence. In December 2017 it signed with Civic Technologies, which uses blockchain technology to authenticate identities, and Bancor, which runs a service allowing tokens to be exchanged with one another easily. However, according to today’s announcement, “TIO will no longer be listed on Bancor.”