The VeChain Foundation has worked very hard in searching for and dealing with the wallet hack that took place on their network. In addition, the foundation has constantly updated the crypto community on the buyback wallet hacks that took place. After an agreement with the Authority Masternode, VeChain has released a patch which has enabled them to freeze the hacker’s accounts.
Last week, the VeChain Foundation stated that 1.1 billion VET tokens had been stolen from their network. At the time, Sunny Lu, who is the CEO of the network, reassured their investors that the network was secure. The theft of the tokens did, however, reveal a weakness in the internal practices of the company.
During a broadcast, Lu explained that as a result of an error by an employee at the foundation, the hack took place. He stated that the employee in charge of overseeing the buyback process, failed to follow all the required procedures when making the buyback wallet.
He then continued to explain that a Trojan infected machine that had keylogging software was used to enable the hacker to get the private key details. What followed was the hacker gaining the ability to easily transfer cryptocurrency assets from the buyback wallet to an account he was fully in control of.
Sunny Lu stated that he would take the necessary steps and that the responsible employee would be held responsible for not properly following the internal management requirements.
As a result of the event, the crypto community has been very quick to praise VeChain for their transparency and their quick response towards the incident. As a result, it has ensured that the network still has their reputation intact.
Updating the Crypto Community
VeChain Foundation is working very hard to remain as transparent as possible and to provide clear information about what happened. Yesterday, they issued an update on the buyback wallet hack. In the update, they stated that by using cryptocurrency data analysis tools, they have been successful in creating a list of hundreds of wallets that received the stolen funds.
The network then approached the relevant exchanges with the blacklisted addresses to ensure that any stolen deposits would not be transferred into the market.
The Steering Committee also stepped in stating that there was a need for more decisive actions in this matter. On the 18th of December, they agreed to contact all Authority Masternodes and to request that an emergency patch be issued that would see all the affected accounts frozen.
The Authority Masternodes took a vote and a patch was issued. As a result, the hacker lost full control over the majority of the funds that were stolen. Everything does not end there though, since the VeChain Foundation is expected to continue working closely with the exchanges in the hope of retrieving all the stolen funds.
The recent events have raised questions about decentralization since the hack seems to highlight jus how centralized the VeChain Foundation is. This is evident since the Authority Masternodes are potentially able to control the network and while, it is not likely that they would do so, it clearly highlights the centralized power held by the Authority Masternodes. The Authority Masternode is a server connected to the network running the VeChainThor full node software and it keeps a full copy of the blockchain.