The debacle that saw hundreds of millions worth of Ethereum cryptocurrency left frozen in wallets provided by Parity continues, juiced by a new accusation that the alleged accident may have been the result of hacking.
Parity wallets were frozen last week after it was alleged that a security vulnerability was “accidentally” triggered, causing a library file that records balances and is necessary for the wallets to function to be “suicided.”
The amount affected by the debacle was first believed to be the equivalent of about $280 million, though Parity has now revised that figure down to 513,774.16 ETH, or approximately $163 million. “We have spent the last few days rigorously examining the events,”the company wrote Monday. “While it is too early to decide on a fixed solution, EIP156 has been discussed for a significant time and has drawn support from various directions in the community.”
EIP516 is a 2016 proposal from Ethereum creator Vitalik Buterin focused on freeing up money locked in certain types of contracts. It’s described by CoinDesk as one possible approach.
The implementation of EIP516, however, would appear to require a hard fork, or a change in software, in Ethereum’s underlying blockchain code. That in turn would need broad community support and would essentially see Ethereum wound back to the point at which the balances in Parity wallets were lost.
There is precedent for such a move: Ethereum was forked to recover lost funds after $55 million was stolen from DAO in 2016. But that was also when Ethereum was a much smaller cryptocurrency. Gaining similar support today would be a much harder ask.
Discussions about solutions to the issue come as Cappasity Inc., one of the companies affected by the incident, said its own research points to a deliberate hack.
“Our internal investigation has demonstrated that the actions on the part of devops199 were deliberate,” company founder Costa Popov wrote on Medium. “When you are tracking all their transactions, you realize that they were deliberate…. Therefore, we tend to think that it was not an accident. We suppose that this was a deliberate hacking.…We believe that if the situation is not successfully resolved in the nearest future, contacting law enforcement agencies may be the right next step.”
Regardless of the cause or reduced amount involved, those affected are still stuck without the ability to trade their ETH holdings at a time cryptocurrency markets are greatlyfluctuating, something that is not a desirable situation for anyone to be in.