Cryptocurrency is specifically known for its security. Peoples are losing faith in cryptocurrency due to these types of attacks. On 27th Jan 2020 Bitcoin Gold suffered a 51% attack and recently IOTA suffered the attack and went offline.
What is IOTA?
IOTA (IOTA) is a distributed ledger for the Internet of Things that uses a directed acyclic graph (DAG) instead of a conventional blockchain.
Its quantum-proof protocol, Tangle, reportedly brings benefits like zero fees, infinite scalability, fast transactions, and secure data transfer.
IOTA cryptocurrency attacked and went offline
On the 12th of February, there was an attack on IOTA due to which IOTA foundation had to shut down its entire network. Hackers found a vulnerability in the IOTA wallet’s app and used it stole user’s funds.
The people of IOTA haven’t still confirmed the actual amount of money stolen but from open-source reporting, it seems hackers have stolen almost 2 million worth of IOTA cryptocurrency.
In late 2017, a few clients revealed that IOTA’s authentic wallet was acting suspiciously permitting tokens to be lost or sent to wrong locations. Also, in mid-2019, a hacker of British origin was captured for taking over $11 million worth of IOTA.
Official Statements of IOTA
IOTA Foundation has put out a statement that it has put an attempt to understand the pattern of attacks and produce a manual verification in total.
“First (but not all) exchanges have responded, reporting that no monitored funds have been transferred or liquidated,” the foundation said. “Most evidence is pointing towards seed theft, cause still unknown and under investigation,” the foundation said earlier. “Victims (around 10 that identified with the IOTA Foundation so far) all seem to have recently used Trinity.”
The above picture is a snapshot of the tweets IOTA posted regarding the trinity attack.
On the 12th of February, they clearly told users to stop using the trinity app and they halted the coordinator which is a node responsible for verification of transactions so that they can stop further penetration into the network and put an end to further damages that can be caused by the hackers.
“After initial investigation we decided to turn off the Coordinator to make sure no further theft can occur until we find out the root cause of these thefts.”
On the 13th of February, they stated they have been working with law enforcement and cybersecurity experts to investigate the coordinated attack, resulting in stolen funds.
When they trailed the pattern left by hackers, they noticed that ten victims were those who had recently use the app as a result of which they told their investment to stop using the trinity app.
A recent update on the 15th of February states that they have successfully found the exploit and the team is currently working on a strategy to mitigate any further risk for token holders and resume network operation.
“After successfully identifying the attack on Trinity through a third-party integration, we are currently working on a plan on how to recover from this exploit and get the network back into full operation.”
On the 16th of February, according to the status page of IOTA, they said “The new Trinity version is currently in progress. This version will be first and foremost, safe. We have identified the vulnerability and it has been removed from the wallet. This version will allow you to open the wallet and check your balance and transactions.”
They have asked the users to avoid imposters acting as IOTA personnel on discord until the new version is released.
“When released, we ask that if you see any unusual activity on your accounts to contact the Discord mod team or IOTA Foundation members directly. Please be aware that there are unfortunately active imposters posing as IOTA Foundation personnel on our Discord. Therefore it is important that you directly initiate contact yourself with the IF or mod team.”
The community of IOTA has declared that in the meantime, they will analyze the full remediation plan before it gets fully signed off.
They have stated that once it gets fully signed off, they will share the details publicly.
Effect of the attack
IOTA has experienced a setback in their cryptocurrency value since the attack.
According to CoinMarketCap, the market cap of 928 million dollars on the day of attack has fallen to 774 million dollars.
Currently, the position of IOTA is 24th on CoinMarketCap, and the value of IOTA has fallen from 0.33 dollars on Wednesday to 0.28 dollars as per today.
Safety Measures as an Investor
We should learn from each and everything. Through these attack on IOTA we can learn the following things:
- Don’t keep any coins on exchanges.
- Always enable 2FA.
- Buy a hardware wallet while investing more money.
More importantly, we should only invest the money we can afford to lose.