Funds Stolen as EtherDelta Suffers DNS Hack
The largest decentralised Ethereum exchange has had their DNS server hacked. This has resulted in users losing funds in the hack.
As a decentralised exchange, EtherDelta is responsible for about 10% of all Ethereum transactions. This shows just how significant a hack of a service like this could be.
At the moment, the details are not yet confirmed but EtherDelta did release a statement on their twitter saying that:
As to how the DNS hack had occurred, there were some rumours that their Cloudflare account had been hacked. Once the hackers were able to get access to the DNS servers on Cloudflare, they could manipulate them.
The hackers most likely altered the DNS servers such that they pointed away from the servers of EtherDelta and to those of a malicious server that was able to hoover up the details of traders.
It may also have been really hard for the traders to spot that they were on a malicious website. This is because the URL was that of EtherDelta even though the site was hosted on a malicious server.
Impact of Hack
Given how easy it could have been to fool a number of traders, the hackers were able to steal around 308 ETH to the staging address. At current market prices their bounty is about $172,000.
If you are worried about any funds that you may have on EtherDelta then you can recover them but you have to be do it without actually visiting the site. Someone was able to give detailed instructions on the EtherDelta Subreddit.
According to the EtherDelta moderators, if you have not logged into the website then your balance should be fine. Similarly, if you logged in to make a trade then your balance should be fine but you should perhaps take caution.
As long as you have not entered your private key when you were signing transactions on EtherDelta then you should be fine. However, if you have signed a transaction recently, you may want to login with their instructions and check on your balance.
Central Points of Failure
This may be another indicator of a central point of failure that has plagued traditional networking. In this case, it was the centralised DNS server that was compromised.
It is also quite ironic that the Ethereum ecosystem has developed a decentralised alternative called the Ethereum Name Service (ENS). With the ENS, the hackers would not have being able to commandeer it.
At this stage though, speculation is indeed rife so it may be a better idea to wait it out and see the post-hack analysis from EtherDelta.
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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.