ICO News: Hackers Spoil the Etherparty ICO

on Oct 3, 2017
Updated: Oct 11, 2019

Vancouver, British Columbia-based Etherparty’s ICO was intercepted by hackers about an hour into the sale of the FUEL token. The cybercriminals redirected the funds of buyers into a fraudulent digital wallet address, in response to which the company took quick action and shut the website down. The company has since fixed the situation and promised to repay any buyers of the FUEL token in the Etherparty ICO who were affected.

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The latest breach involving the Etherparty ICO feeds the fears of buyers and issuers alike and is precisely the type of risk that regulators have been warning investors about all year. Canadian regulators said in August that they would examine ICOs on a case-by-case basis to determine whether the digital token should be regulated as a security, which bears some resemblance to the guidance offered by the US SEC.  The tone caused Canadian messaging app on the blockchain KiK to kick Canadians out of the sale of its digital token KIN, from which it raised nearly USD 100 million.

In its white paper, Etherparty makes it clear in no uncertain terms that the document should in no way be construed as a prospectus, and the FUEL token sale is by no means the offering of securities. Buyers receive thousands of ETH tokens for ETH 1. According to the white paper, the FUEL tokens from the Etherparty wallet power the platform, not tokens from any competing wallet. Apparently, however, a vulnerability in the digital wallet is what appears to be at the center of the hacking scheme. 

Etherparty dubs itself as the Wix of smart contracts, doing for digital contrats what companies such as Wix have been able to do for website building. Etherparty technology facilitates the management of smart contracts across multiple blockchains, and the company says users can access blockchain-driven smart contracts without any familiarity of the technology behind them.  

And while the breach is not the type of media exposure any upcoming ICO would want, the Etherparty ICO was off to a good start, managing to sell 10 million of its FUEL tokens in the first hour of the sale before the hackers accessed the deal. The public sale came on the heels of an ICO pre-sale in which EtherParty sold more than 400 million of its FUEL tokens. The EtherParty ICO is ongoing until Oct. 29 or the token sells out, at which time it will be more clear the impact that the hacking event had on the deal.

Etherparty, meanwhile, has all the makings of a successful ICO, with blockchain veterans such as Anthony Di Iorio joining as both an advisor and investor to the deal. Di lorio is the co-founder of the Ethereum network and chief executive of digital wallet application Jaxx, the latter of which the FUEL token will be integrated into. Di lorio similarly backed the recent Unikrn ICO. 

The Etherparty ICO has capped the token sale at 1 billion FUEL tokens. 

For more information about buying or trading Ethereum, see our complete guide here.




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