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Sentinel Network reports HitBTC hacked for $1M

Sun 22 Aug 2021 ▪ 15h35 ▪ 2 min read — by Siobhan Jones

Sentinel Network reports that cryptocurrency exchange HitBTC was hacked, losing 40 million DVPN tokens (730,000) that users had entrusted to the platform. The DVPN utility token serves as a reward for providing bandwidth to a distributed p2p VPN network.

Seed phrase leak

The theft was prompted by HitBTC revealing its mnemonic phrase, a set of words meant to help recover a digital wallet. The cryptocurrency exchange claims that the seed phrase appeared in the “memo” field intended to clarify transaction details due to a mistake made by Sentinel Network developers.

“This is completely out of our control, HitBTC had delayed the distribution of funds to users and compromised their own mnemonic,” Sentinel tweeted.

In a comment, Srinivas Baride of Sentinel called this situation a “gross negligence” and hopes that HitBTC will return all funds to users. HitBTC did not respond to press requests for comment.

It is to be noted that such a miscalculation would not have caused the hack if HitBTC had immediately started distributing DVPNs. However, the site decided to conduct a trial transfer by “highlighting” the seed key. After this misstep, any blockchain user could withdraw the tokens.

Hack attacks on cryptocurrency exchanges have become more and more frequent. It remains to be seen whether Sentinel Network developers or HitBTC cryptocurrency exchange itself are to blame. However, the situation is likely to further strengthen the platform’s cybersecurity.

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Siobhan Jones avatar
Siobhan Jones

Hi everyone, thanks for reading my article! Join me on my journey to crypto enlightenment, we can always learn something new from each other – no one person has all the knowledge in the world.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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