human error and mismanagement of private keys by the employees

human error and mismanagement of private keys by the employees

It was caused due to human error and mismanagement of private keys by their employees.

This hack constitutes more than 4.6% of the treasury of the foundation.

It also accounts for 1.3% of the total supply of VeChain.

VeChain CEO Sunny Lu reported. Approximately US$ 6.5 million have stolen from VeChain tokens (VET).

Foundation information suggests that the compromised wallet created without following the standard procedures of the organization. The foundation says their auditing team missed it because of human error.

It reported in the financial report of the company in September 2019 that it managed 27.3 per cent of the total token availability. This hack constitutes more than 4.6% of the treasury of the foundation and also accounts for 1.3% of the total supply of VeChain.

The foundation reported the incident to Singapore law enforcement and various exchanges. This specifically instructed exchanges to blacklist the hackers ‘ addresses that had been sent to them by stolen funds.

Hacken, a crypto-specialized cybersecurity agency, and vechainstats.com have also recruited to assist. The foundation claims that the skills mentioned above will help monitor and control the situation in blockchain and cybersecurity.

This incident may also have uncovered an exciting response from exchanges to these types of problems. Binance disabled margin shorts for VeChain when the news broke, allegedly without any formal announcement, according to Larry Cermak of The Block.

In the ongoing issue of whether and how crypto exchanges can monitor trading activity on their platforms, it is another exciting turn.

All this is entirely unreasonable at first glance. The exchange should not prevent people from abbreviating a token when that token receives terrible news and is directly contrary to the whole point of the abbreviation. It is also quite telling that only shorts are disabled, though long gaps are still apparently entirely appropriate.

It should also be noted that shutting down margin shorts in the case of VeChain would probably have made the market response more rational rather than less. That’s because the theft of VeChain isn’t a big deal. It would be almost invisible to respond rationally to this robbery by the consumer. It would be a cumulative $6.5 million reduction in the VET market cap, minus the cost of one private-key impromptu lesson.

It is hard to argue from a purely ethical perspective that there is something inherently wrong to defend VET token owners from an unreasonable price drop.