Gatecoin lost 186,000 ETH in a hacker attack during DAO crowdsale

A security incident at Hong Kong-based digital currency exchange Gatecoin affected the sale of assets associated with Ethereum-based decentralized organizations (DAOs) in the city, according to reports on Friday.

Gatecoin suffered a cyberattack on its hot wallets last week, resulting in the loss of a large amount of funds. According to the latest news from the exchange team, the loss of this incident is as high as $2 million, confirming the rumors that began to circulate after the attack.

Gatecoin has claimed that the exchange lost as much as 186,000 ether and 250 bitcoin, worth a total of $2.14 million at press time. The exchange also said that they believe the attack began on May 9 and lasted for three days.

Although details are currently unclear, Gatecoin said it is conducting an internal review of the incident. In a statement about the attack, the company said its procedures for storing funds offline were also compromised.

Gatecoin said in a statement:

We have previously communicated that most of our users’ crypto assets are stored in multi-signature cold wallets. However, the malicious external party involved in this vulnerability managed to change our system so that the transfer of ether deposits bypassed the multi-signature cold storage process and went directly to the hot wallet at the time of the vulnerability. This means that the lost ether funds can exceed the 5% limit we set for hot wallets.

The timing of this hack is noteworthy given the popularity of the ongoing DAO crowdsale, which has raised nearly 10.72 million ether, worth nearly $120 million, at the time of this writing.

Gatecoin, one of several platforms that offers ether purchases, said following the attack that it would build a portal for withdrawing DAO tokens and fiat currencies in the next two weeks.

There is currently no clear date for when Bitcoin and Ethereum withdrawals will be processed.

The Gatecoin incident is the latest cybersecurity incident in the exchange space, following incidents at ShapeShift, Cointrader and other exchanges.