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

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November 7, 2017 11:32 PM

The wallets affected are all "multi-sig" — the type of digital wallet used most often in initial coin offerings.

An estimated $280 million worth of the cryptocurrency ether is now locked up after a user accidentally deleted the code necessary to access the digital wallets hosted by the company Parity Technologies.
The vulnerability affects multi-signature digital wallets launched through Parity since July 20.
Multi-sig wallets usually contain large sums of money, since they are used primarily by startups or large groups looking to prevent any one member from running off with the money.

An estimated $280 million worth of the cryptocurrency ether is locked up because of one person's mistake.

An unidentified user accidentally deleted the code library required to use recently created digital wallets within Parity, a popular digital-wallet provider, according to a security alert posted on the company's blog on Tuesday.

The freeze affects all multi-signature wallets created on Parity after July 20.

Multi-sig wallets are especially popular among cryptocurrency startups and other 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 want to run off with the money.

For this reason, it's also a popular way of storing cryptocurrency raised in initial coin offerings, a new fundraising technique in which investors trade cryptocurrencies like ether and bitcoin for new ones created by companies.

Exactly how much cryptocurrency has been locked up because of the bug is unclear, but some cryptocurrency blogs have reported that Parity wallets make up 20% of the entire Ethereum network, which powers the ether cryptocurrency.

Researchers have estimated that about $280 million worth of ether is now inaccessible, including $90 million raised by Parity's founder, Gavin Wood. Parity has not shared any official totals, though a spokeswoman disputed this number.

Update: To the best of our ... @ Parity Technologies

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