Fusion Network Loses Millions in Private Wallet Hack

A private wallet operated by the Fusion Foundation was drained of its funds, accounting for roughly 25 percent of the total FSN token supply.

AccessTimeIconSep 30, 2019 at 5:00 p.m. UTC
Updated Sep 13, 2021 at 11:30 a.m. UTC

Millions of tokens have been stolen from the Fusion Foundation, the non-profit tasked with maintaining the network of the same name.

In a blog post, the foundation said one of its wallets, containing 10 million of the Fusion Network’s native FSN tokens and 3.5 million ERC-20 FSN tokens had been drained Saturday. The thief’s haul was worth an estimated $3.75 million as of press time.

The Fusion Foundation went on to suggest it may have been an inside job, writing:

“There is uncertain evidence showing that theft may have been caused by personnel related to the Fusion Foundation.”

The Fusion Foundation launched its mainnet last summer and has been migrating FSN tokens away from the ERC-20 standard. The interoperability platform aims to bring legacy financial institutions to the blockchain, by facilitating the transfer of stablecoins and other digital assets.

In an interview with CoinDesk, Chief Product Officer John Liu said the foundation has a good understanding of not only who the hacker is but how to de-monetize their loot.

“This is not a newbie hacker. This criminal has been preparing this in advance,” Liu said via phone Monday. “He was well prepared to implement this.”

Liu said the Foundation has been tracking the whereabouts of the coins and working to isolate them. To date, most of the stolen funds have gone through exchanges Bitmax and Hotbit. According to the foundation's blog post, crypto exchanges OKEX, Huobi, Bitmax, Citex and Hotbit have stopped accepting deposits and transfers of FSN.

As Liu told CoinDesk, the foundation’s methods for isolating the hacker's funds can not be disclosed until later. With about 25 percent of the Fusion Network’s coins having been stolen, a lot is on the line.

According to data provider Messari, FSN’s current market supply stands roughly 59 million with a market capitalization of $9.5 million as of press time.

Broken lock image via Shutterstock

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