Ethereum Melt Down! $300 Million in Funds ‘Accidentally’ Frozen by One User

Ethereum Melt Down

Yesterday, a speculated $280 million dollars worth of ether was frozen on the cryptocurrency wallet, Parity. In a security alert on Tuesday, they announced the discovery of a “vulnerability” in their wallet that allowed users to change code and access wallets that didn’t belong to them. This crisis could result in a hard fork in the future for ethereum.

Parity states that one individual that is new to the ethereum platform “suicided” the wallet, deleting all of its code and freezing all ether tokens enclosed inside. All Parity wallet holders are now unable to move their funds out of the wallet.

They are currently scrambling to come up with a solution for this chaos but the head of security for the Ethereum Foundation, Martin Holst Swende, in an interview with CoinDesk that another hard fork is on the horizon to free up the funds.

Holst Swende said, “There’s, unfortunately, no way to recreate the code without a hard fork. Any solution which makes the locked funds accessible requires a hard fork.”

With all that confirmed, an emergency upgrade is needed, should they want users to recover their frozen ether.

Sudden upgrades and ‘hard forks’ have been a testy issue in the past among developers, but this one, in particular, should ruffle feathers, as the fork would need to occur across the entire ethereum platform.

Ethereum developers are currently working on other proposals for releasing the funds but a Parity developer, Afri Schoedon, told CoinDesk that there is “no easy fix.”

Parity Technologies, the company that developed the wallet, is based out of the UK and is completely separate from the Ethereum Foundation. The Ethereum Foundation is the non-profit company behind Geth which is the most popular Ethereum client.

Holst Swende states that moving forward the team will work on one or several proposals and work together as a community to select the best solution for all parties involved.

The frozen ether funds themselves cannot be removed, so for security reasons, the process doesn’t need to move as urgently as they once assumed. The only issue is the inconvenience of users not having access to their funds.

Ethereum’s founder, Vitalik Buterin, publicly declined to comment on Twitter this morning, stating, “I am deliberately refraining from comment on wallet issues, except to express strong support for those working hard on writing simpler, safer wallet contracts or auditing and formally verifying security of existing ones.”

More developments should emerge in the near future, as developers work tirelessly on a solution.

Featured Image: depositphotos/ egal

Sponsored Crypto Content