Someone deleted some code in a popular cryptocurrency wallet — and as much as US$280 million in ethereum is locked up

User accidentally deleted the code necessary to access the digital wallets hosted by the company Parity Technologies

PUBLISHED : Wednesday, 08 November, 2017, 2:01pm
UPDATED : Wednesday, 08 November, 2017, 2:09pm

By Becky Peterson

An estimated US$280 million worth of the cryptocurrency ethereum is currently locked up thanks to one person’s mistake.

An unidentified user accidentally locked up all of the recently-created digital wallets within Parity — a popular digital wallet provider — by deleting the code library required to use those wallets, according to a critical security alert posted to Parity Technology’s blog on Tuesday.

The freeze impacts all “multi-sig” wallets created on Parity after July 20.

Multi-sig wallets — short for multiple signature — are especially popular with cryptocurrency startups and other collective groups because they require more than one person to agree before any currency gets moved around. It’s a safeguard against rogue employees who might run off with the cryptocurrencies for their own gain.

For this reason, it’s also a popular way of storing cryptocurrency raised in initial coin offerings, or ICOs — a new fundraising technique used by some companies in the blockchain space, in which investors trade cryptocurrencies like ether and bitcoin for new currencies created by the company.

Exactly how much cryptocurrency has disappeared due to the bug is unclear, but some cryptocurrency blogs have reported that Parity wallets make up 20 per cent of the entire ethereum network.

Researchers familiar with the space have estimated around US$280 million worth of ether is now inaccessible, including US$90 million of which was raised by Parity’s founder Gavin Woods.

Parity has not shared any official totals.

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Read the original article at Business Insider