ICO Funds Among Millions Frozen In Parity Wallets

Some high-profile token issuers are feeling the effects of a vulnerability in an ethereum wallet software revealed this week.

After a developer stumbled upon the bug – "accidentally" deleting a code library for the Parity wallet and freezing more than $152 million-worth of ether – several startups and open-source projects that recently launched initial coin offerings (ICOs) have come forward, stating that theirs are among the 151 addresses impacted by the software failure.

As such, the development has put considerable attention on U.K.-based Parity Technologies, the developer of the software, which also saw $30 million in ether stolen in a July hack.

Further, it comes at a time when ethereum itself is receiving a significant amount of attention for fueling around 10,000 ICO projects, 13 of which have raised over $100 million.

One of those 13, interoperability platform Polkadot, raised more than $145 million in a token sale last month and is currently having to deal with $98 million-worth of its ether funds being locked up in Parity because of the flaw. In a blog post, the Web3 foundation, which supports the Polkadot project, asserted that all work will continue regardless of the frozen funds.

According to the post, while the wallet containing ICO contributions has been impacted, it does not represent the entirety of the company's funds, adding:

"Our ability to build Polkadot as planned and to the original timetable has not been affected."

Another ICO issuer effected by the hack but soldiering on is Iconomi, a digital asset management platform that raised more than $10 million from a token sale in September.

According to ethereum blockchain explorer Etherscan, Iconomi's frozen wallet represents around $34 million. However, the company wrote in a blog post that the wallet holds only company assets, not customer funds.

"All users' digital assets stored on the platform are completely safe, and the functioning of the platform is unaffected," the post said. 

Musiconomi, the smallest ICO-funded company to announce publicly that it has been affected, has about $4.8 million frozen in Parity accounts right now. The project has yet to release a statement, although a company representative told CoinDesk it will elaborate as soon as possible.

Meanwhile, on social media, members of the Parity team have urged those affected to get in contact. The firm has also created a dedicated website that allows users to quickly find out if their wallet is among those frozen.

Currently, close to 600 wallets have been verified as locked by the issue.

Cracked ice image via Shutterstock

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Original author: Rachel Rose O'Leary
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