The $6 Million Fusion Network Hack Forces Exchanges To Halt FSN Trading

The dark side of the crypto emerges once again. This time, like every other time, a major hack took place leaving most of us clueless. Fusion Network has been the target of this hack as over $6 million worth of FSN tokens were stolen.

The Fusion Swap Wallet Was Compromised

Almost 3 months ago, Fusion mainnet went live. To enable users to switch from ERC-20 to native FSN tokens, a new wallet address was created. This “swap” wallet has been compromised on September 28th.

The hacker stole 10 million native FSN and 3.5 million ERC-20 FSN tokens.

Out of these 13 million stolen tokens, some were transferred to exchanges with amounts ranging from 50,000 to 200,000 FSN tokens. These tokens were later dumped on the market slashing the price of the token by almost 50%.

The Fusion Team Took Action

Quickly realizing the theft, some of the key members of the team took action.

First, they approached major exchanges to suspend trading. All the cryptocurrency exchanges froze Fusion. No trading. No deposit. And no withdrawal.

Exchanges include OKEx, Huobi, BitMax, CITEX, and Hotbit.

Second, the rest of the funds from the swap wallet where stored in a cold wallet — so no one could access or transfer them. Although the damage has already been done, the theft wallet still has tokens.

As mentioned in the blog post, after the incident, Fusion saw abnormal wash-trading across exchanges like BitMAX and Hotbit.

Fusion-BitMax.jpg

Founder Blames Himself

When asked who the culprit is, founder of Fusion DJ Qian said:

To some extent, I am. Because FSN got stolen under my leadership. But if you are asking who did this, we were collecting evidence since yesterday, and we are handing over those evidence to police.

Only the Fusion team has access of the private keys of the swap wallet. If rumors are true, a key member of the Fusion team decided to compromise the wallet. What will happen next remains to be seen.

Also, despite submitting the details to the cops, several community members have suggested alternate solutions:

  • Fork or swap: This is a painful process, which may take time and rest of the roadmap will face delays.
  • Buyback through exchanges: The Fusion team can always buyback tokens at a cheap price. Then burn these tokens. It will cost a couple of millions of dollars.

Update: From the latest update we have received, DJ Qian has already submitted the details of the cops, and it appears to be an inside job. Someone from the team had access to the private keys of the swap wallet, and managed to transfer these tokens.

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