Crypto Exchange COSS Removes 10% of Its Tokens’ Supply From Hackers’ Wallet

A Reddit user who had a large amount of funds on the COSS cryptocurrency exchange has recently revealed he has been hacked for over $860,000. The incident saw hackers take about 10% of the total supply of COSS tokens from his account, which prompted the contract’s owners to deduct the tokens from the hackers’ wallet.

Per the thread on Reddit, the user ‘blockchainified’ found out that on October 14 he was hacked while he was asleep. Once he turned on his laptop, he saw the attacker managed to brute force his way into his account, to steal 14 BTC ($89,500), 22 ETH ($4,400), and 11.7 million COSS tokens ($770,000).

About 19,000 EOS (over $100,000) could’ve also been stolen, although at the time it wasn’t possible to withdraw the cryptocurrency from the exchange. In the thread, the user blames COSS for the incident as at the time it went under maintenance – which the user claimed was an attack.

The user claimed to have been using two-factor authentication (2FA), but that it fell to a brute force attack that saw hackers try to gain access over 25,000 times. The exchange seemingly didn’t lock the account after a few failed attempts.

 Various users on COSS’ Telegram channel questioned the user about the incident. They found out the user has previously claimed to have been hacked on leading cryptocurrency exchange Binance. Although the thread itself has been deleted, an archived version of the post is still accessible. At the time, blockchainified admitted his email account had also been hacked.

COSS’ Reaction

The COSS exchange itself has reacted to the incident. In a Medium post it asked the hacker to return nearly 10 million COSS tokens to an ERC address. If he did that, the post stated, COSS would “not pursue this case any further.”

On Telegram, a user suggested the COSS contract’s token holders use a function that lets them remove funds from the hacker’s wallet. Shortly after, Rune Evensen, the founder of COSS, implied the move had been done, telling the community to “check the Etherdelta wallet,” referring to a decentralized cryptocurrency exchange the hacker was presumably planning on using.

Users on Telegam noticed EtherDelta's address has 0 COSS tokens in it

CryptoGlobe reached out to Rune Evensen to know more about the incident. Evensen noted the team “reacted instantly when the incident was reported,” and added that a thorough investigation took place while the exchange was taken down for “approx. 24hours” to ensure there were no breaches on its end.

He added:

Short-term an incident like this damages the rep[utation] but it also strengthens the site. We have had a very strong support from our community and we have been in direct dialogue with the involved party since the incident.

He further confirmed COSS used a function in the contract to remove the tokens from the hackers’ account.

BBC: Facebook Planning to Launch ‘GlobalCoin’ in Q1 2020

Siamak Masnavi

Social networking giant Facebook is planning to launch its own cryptocurrency (internally dubbed "GlobalCoin") and crypto-powered global payments network (internally called "Project Libra") worldwide by Q1 2020, according to a report published earlier today by BBC News, the world's largest broadcast news organization.

Project Libra's Origin Story

  • 8 May 2018: In a post on Facebook, David Marcus, the former head of Messenger, who was at that time also a board member (since December 2017) of crypto exchange Coinbase, revealed that he was leaving that role to set up a new group focused on exploring applications of blockchain technology across the whole of Facebook.
  • 13 December 2018: Cheddar reported that Facebook’s blockchain group is planning to "potentially disrupt the entire payments industry":

"At a private dinner Facebook hosted during a recent crypto conference, one attendee told Cheddar that Facebook employees pitched the idea of creating a decentralized digital currency for the social network’s 2 billion users."

  • 21 December 2018: Bloomberg reported that Facebook was creating its own cryptocurrency (a stablecoin) for money transfers within its highly popular messaging app WhatsApp.
  • 28 February 2019: The New York Times confirmed Bloomberg's earlier story, and said that, according to its sources, this project was "far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers."
  • 8 April 2019: Nathaniel Popper, one of the two journalists who wrote the report in the New York Times, provided this update (on Twitter) about Facebook's cryptocurrency project:
  • 2 May 2019: The Wall Street Journal reported that Facebook was "recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system," and that the core part of this initiative (code-named "Project Libra") is "a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet." Furthermore, this report said that, according to people familiar, Facebook was talking to "financial institutions including Visa Inc., Mastercard Inc. and payment processor First Data Corp." about investing in this project.
  • 17 May 2019: A report by Reuters said that FinTech company Libra Network was registered in the Republic and Canton of Geneva on May 2. Looking at the entry for Libra Networks, which was published on May 7 in the Swiss Official Gazettte of Commerce (SOGC), tells us:
    • Libra Networks LLC (registration number: CHE193533388) has its registered office in Geneva.
    • According to the English translation, the stated purpose of this company is "provision of services in the fields of finance and technology, as well as the development and production of related software and infrastructure, particularly in connection with investment activities, the payment operation, the financing, identity management, data analysis, big data, blockchain and other technologies."
    • The share capital is CHF 20,000 (100 shares, each with a nominal value of CHF 200); all of the shares are owned by Facebook Global Holdings II, LLC.

Facebook's Stablecoin: GlobalCoin

Here is what we have learnt from the BBC News report:

  • Facebook "is planning to set up a digital payments system in about a dozen countries by the first quarter of 2020."
  • The plan is to start testing the new cryptocurrency (some kind of stablecoin), GlobalCoin, by the end of 2019.
  • Facebook has been getting "advice on operational and regulatory issues" from the UK's central bank governor Mark Carney (whom Facebook founder and CEO Mark Zuckerberg reportedly met in April) and from U.S. Treasury officials.
  • Facebook is also in talks with global remittance firms such as Western Union "as it looks for cheaper and faster ways for people without a bank account to send and receive money."

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