Trader head in handsReuters

  • An estimated $280 million worth of the cryptocurrency
    ethereum 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 impacted the “multi-sig” digital
    wallets launched through Parity since July 20.
  • Multi-sig wallets usually contain large sums
    of money since they are primarily used by startups or large
    groups looking to prevent any one member of the group from
    running off with the money. 

 

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

An unidentified user accidentally locked up 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% of the entire ethereum network. 

Researchers familiar
with the space have estimated around $280 million worth of ether
is now inaccessible, including $90 million of which was raised by
Parity’s founder Gavin Woods. Parity has not shared any
official totals, though a spokeswoman from the company disputed
that this number was correct.

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