Hacked: KickICO Recovers $7.7 Million Stolen After Smart Contract Breach

  • The KickICO crowdfunding platform was hacked due to a smart contract breach. $7.7 million worth of KickICO’s native tokens were stolen.
  • The funds were reportedly recovered and will be returned to users.

KickICO, a blockchain-powered crowdfunding platform, was reportedly hacked on July 26, which resulted in a loss of over 70 million KICK tokens worth an estimated $7.7 million. The project’s team revealed the hackers managed to access “the account of the KICK smart contract,” thus stealing the tokens.

KickICO’s official incident report noted they had “experienced a security breach [and] learned about the incident after the complaints of several victims, who did not find tokens worth 800 thousand dollars in their wallets.” The report added that the blockchain network’s developers had managed to regain control over their smart contract account

The project’s team assured users their stolen tokens will be returned. Token holders were told to report all their complaints to official KickICO representatives.

“We’ll return exact amount of tokens to [the wallets of] their legit owners. We apologize for the inconveniences, but guarantee that the situation is under control,” the incident report stated.

KickICO team

According to KickICO’s developers, hackers were able gain access to the private key associated with the token’s smart contract. After that, “they employed methods used by the KickCoin smart contract in integration with the Bancor network: hackers destroyed tokens at approximately 40 addresses and created tokens at the other 40 addresses in the corresponding amount.” As a result, the overall number of KickCoins remained intact.

Avoiding Further Losses

The report went on to acknowledge the timely response the KickICO community had, which helped the blockchain network’s developers regain control over the stolen funds. Users were also told that preventive measures had been taken to avoid "further losses” by “replacing the compromised private key with the private key of the cold storage.”

Notably, this marks the second time this month that the Tim Draper-backed Bancor network has been associated with a security breach. Some members of the KickICO community have attributed the hacking incident to a dramatic prise rise KICK tokens had the last couple of weeks.

In fact, KickICO’s report noted that the platform’s native token “tripled in price in the last two weeks (from $0.04 to $0.12).” The report also mentioned that KickCoins ranked “among top 10 coins in [terms of the rate of price increase] last week.”

UK's Regulator Warns Against Fraudulent Firm Cloning Financial Giant TP ICAP

The UK’s financial regulator, the Financial Conduct Authority (FCA), has uncovered another allegedly fraudulent crypto-related scheme.

On Friday (May 24, 2019), the FCA revealed that a company called ICAP Crypto had been impersonating an established firm known as ICAP Europe Limited. ICAP Crypto reportedly attempted to lure unsuspecting investors into a potential scam involving cryptocurrencies.

Using Company Details Belonging to Legitimate Financial Firms

While ICAP Crypto’s management does not claim its services are regulated by the FCA, the allegedly fraudulent firm has been using the company details that belong to legitimate UK-registered financial service providers.

The FCA has warned that the potential scammers operating ICAP Crypto may be using the company license information of established firms in order to lure investors into investing into a fraudulent crypto scheme.

According to the FCA, ICAP Crypto has provided contact information which may be “mixed” with details that belong to TP ICAP, one of the largest global interdealer brokers. Moreover, the FCA cautioned users that ICAP Crypto has launched a website that is not licensed by the FCA to offer financial services.

No Details Regarding Crypto Services

There’s also no association between the management and services provided by TP ICAP and ICAP Crypto, the UK’s financial regulator clarified. Furthermore, the FCA’s investigation has revealed that ICAP Crypto appears to be offering various crypto-related services including a platform to launch initial coin offerings (ICOs).

Although ICAP Crypto seems to be offering several different cryptocurrency-related products, the FCA found that the allegedly fraudulent firm has not provided any specific details regarding its services.

ICAP Crypto’s management states that its services include “a sophisticated blend of engineering with experience to empower thousands of marketers to access markets around the world through the use of digital currency entirely outside the traditional financial system.” However, it remains unclear what type of services the company actually offers.

FCA Planning To Draft Comprehensive Crypto Regulations

In January 2019, the UK’s financial regulator called for increased regulatory oversight over the leading European nation’s cryptocurrency market. In order to create regulations for digital assets, the FCA launched a consultation which requested feedback regarding how to regulate crypto transactions.

The FCA had specifically asked for feedback on how to regulate crypto exchanges, digital asset payment processing services, wallet providers, and broker dealers offering crypto derivatives.