Sentinel Network said in a tweet Friday that 40 million of its DVPN coins were stolen from users through a vulnerability on the HitBTC bitcoin exchange.
- The decentralized peer-to-peer (P2P) bandwidth marketplace, which supports the Sentinel dVPN application, said the theft resulted from HitBTC exposing its mnemonic phrase, a group of words that are designed to help recover a digital wallet or cryptocurrency.
- “This is completely out of our control, HitBTC had delayed the distribution of funds to users and compromised their own mnemonic,” Sentinel wrote in its tweet.
- In a comment to CoinDesk, Sentinel’s Srinivas Baride, called the exposure “gross negligence” and said he hoped HitBTC refunds its users and reassesses its management of user funds.
- In an email, HitBTC said it “always” does token swaps “according to our guidelines and on newly installed machines,” to prevent breaches, noting that “since day 1 we have had the highest standards in place for security.”
- Sentinel Network allows anyone to be able to sell their bandwidth on its marketplace. Developers can use the Sentinel Protocol, built with Cosmos SDK, to build applications, both public and private, that use the Sentinel Network’s bandwidth marketplace for dVPN applications.
UPDATE (August 22, 17:27 UTC): Adds comment from HitBTC.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.