Second Parity Wallet Flaw Locks Users Out of Their Wallets

Multi-sig users left unable to access their funds

Parity Technologies, the company responsible for the widely-used Ethereum Wallet, Parity Wallet, announced yesterday that users who created a multi-sig wallet using their service after 20 July, could be become victim to locked funds. We first reported this event here.

According to the firm’s statement, an inherent software flaw has locked access to the funds stored in these wallets.

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The exploited flaw has left dozens of cryptocurrency users with denied access to their Wallets, with a total of $280 million worth of Ether affected.

This latest security flaw appeared shortly after Parity made a software update available a few months earlier to address a separate issue. This initial issue is thought to be responsible for several ICOs losing a total of $30 million worth of Ether.

Parity stated that the latest security flaw was caused by a user who tried to exploit the flaw in the code, which essentially removed some of the crucial source code.

In addition to users being locked out of their accounts, several ICOs have also lost access to their funds due to the vulnerability.

Most notably, the Polkadot ICO administrators currently cannot access their wallet, which holds over $92 million worth of Ether. Ironically, the co-founder of Ethereum as well as Parity technologies, Gavin Wood, is also one of the creators of Polkadot.

Some weeks ago, Wood voiced concern via his social media accounts regarding the many hard forks currently occurring in the cryptocurrency community. Wood suggested that Ethereum postpone their Byzantium hard fork as, according to Wood, it could be an invitation to a mass of bugs and technical vulnerabilities. However, the fork occurred without any issues arising.

Since then Wood has come under criticism from the crypto community. Many users accused the developer of not giving the security measures of his own product enough consideration, as several bugs managed to bypass their detection.

According to an Ethereum developer, Nick Johnson, however, the lost Ethereum could perhaps be recovered by the scheduled Constantinople hard fork. The latest scheduled fork intends to implement the Ethereum Improvement Proposal 156.

While this is yet to be confirmed, Parity Technologies stated that they are currently trying to solve the latest issues and that they would regularly keep their users updated as more information comes to light. Now more than ever, learning to secure your cryptocurrency is critical if you’re holding any coins.

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