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Digital Currency Exchange Gatecoin Offline After Loss of Funds

Hong Kong-based digital currency exchange Gatecoin has reportedly experienced a hack, resulting in losses from its connected wallets.

May 13, 2016 at 10:50 p.m. UTC
Updated Sep 11, 2021 at 12:16 p.m. UTC

UPDATE (14th May 11:40 BST): This piece has been updated with a statement from Gatecoin.


Hong Kong-based digital currency exchange Gatecoin has reportedly experienced a hack, resulting in losses from its connected wallets.

CEO Aurélien Menant took to the Slack channel for the DigixDAO project yesterdayand indicated that the exchange lost control of bitcoins and ethers, the native token of the Ethereum network, during the incident.

Menant said that tokens tied to the DigixDAO project as well as the Augur and TheDAO projects were unaffected.

The CEO indicated via Slack that he was not entirely clear on the amount of funds taken, but noted “[the numbers] are big” and that the exchange will seek to refund customers following the loss. Though unconfirmed by any official source, rumors have begun circulating that the losses could be as much as $2m.

In a statement provided to CoinDesk, Gatecoin said:

"Last night Asia time, we suspected a potential leak on our hot wallets. Therefore, we decided to shut down the exchange and ports in order to minimise further potential losses, and we are conducting a full forensic investigation to identify the root of the issue. This is why Gatecoin's user interface and API are currently offline."

The hack comes amid the ongoing crowdsale for TheDAO, an initiative aimed at providing a funding mechanism for Ethereum projects.

Gatecoin has been facilitating the sale of tokens used to hold votes in the decentralized autonomous organization (DAO) through the use of IOUs, which according to materials on the exchange’s site would be swapped for tokens following the completion of the crowdsale.

Earlier today, the exchange took to Twitter to report that it had taken its website offline “due to a high risk” that funds would “leak” from some of the connected wallets. The warning read:

— Gatecoin (@Gatecoin) May 13, 2016

On Twitter, Gatecoin later said it was investigating the issue, and other posts suggest that the exchange had been taken offline prior to the announcement, a move attributed on the main Gatecoin page to “maintenance”.

Gatecoin did not immediately respond to a request for comment.

Image via Gatecoin

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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