The Veritaseum Hacking Conspiracy
The crypto market is highly unpredictable - just recently we saw the free-fall in Bitcoin price and how there was blood on the streets.
Now the markets are slowly but surely recovering.
Volatility and uncertainty go hand in hand with cryptocurrencies, but unfortunately, scam and controversies have also become a parasitic part of this industry.
Every now and then, we hear new ICOs (Initial Coin Offerings) launching new cryptocurrencies into the market.
While these ICOs are heavily marketed and grab a lot of attention, they are also prone to attack from hackers and people wanting to make some quick profit at the expense of systems that are vulnerable.
And this is exactly what happened with the Veritaseum ICO.
About Veritaseum
Veritaseum is a company focused in the financial services sector. It has it's own cryptocurrency called VERI tokens. Veritaseum aims to allow P2P capital markets that are software driven, without involvement of banks, brokerages or traditional exchanges.
You can read more about them at their website.
The ICO hack cost Veritaseum almost $8.4 million:
A undisclosed weakness in the Veritaseum systems was used by hackers to exploit and funnel away about $8.4 dollars worth of Veritas tokens during the Veritaseum ICO.
Although the attack was gradual, it took time for the company's developers to notice it. After funds from the company were found being transferred to an unknown wallet, they immediately went into action to lock down the transfer.
But the damage was already done, and the attackers who had used sophisticated means to steal the funds were able to sell their tokens immediately to other buyers as the ICO was ongoing. The culprits tried to ensure to make tracing the stolen tokens difficult by moving the funds through multiple wallets. The large sell orders inevitable led to affecting the price of the token during the ICO.
Not only did the reputation of the ICO take a beating, but the company's clear lack of effort to put proper security protocols was brought up for a heated debate. Oddly enough, the company had been lackadaisical in adopting SSL and even the data transmitted across their network lacked appropriate encryption protocols.
As the result of the hack, the company issued a statement to reassure partners and investors that the necessary steps had been taken to ensure such breaches wouldn't happen in future. Luckily for investors, the tokens that were hacked belonged to Veritaseum and not the actual investors.
There's more to the conspiracy:
The founder of Veritaseum, Reggie Middleton was quick to point out that he believed one or more of their corporate partners may be involved in the hack. The fact that this massive hack was an insider job makes this conspiracy even more incredible.
Veritaseum itself is not free from scrutiny, a few cryptocurrency enthusiasts claimed it to be a scam in itself with the way its ICO was structured. Some of the red flags that were put out against the ICO included the basic and unprofessional looking website filled with redundant and unnecessary information, the rejection by centralized exchanges to list VERI (only the decentralized exchange EtherDelta listed the VERI tokens), the founder Reggie Middleton's previous failure in creating similar products as well as the concentration of 98% of VERI coins in his hands. These points did raise some concerns regarding the legitimacy of the coin and its future.
ICOs are prone to attacks
As can be seen from the time cryptocurrencies came into existence, the cryptocurrency market makes a very lucrative target for hackers. Several ICOs have lost millions of dollars worth of tokens to such attacks, and the need of the hour is to have effective protocols and security measures in place to safeguard the funds of both the company as well as investors.
Please drop comments down below and let us know your thoughts about this new series of conspiracy articles and also any particular conspiracy you would want us to fish out and write about.
Until next time...
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