On November 21st, 126 million Verge (XVG) coins were stolen from CoinPouch. November 2017 was not particularly lucky for some cryptocurrency enthusiasts. Verge worth $655,000 at the time was lost from CoinPouch only days after $31 million worth digital tokens were stolen from Tether in a similar malicious attack.
When Touch Titans launched CoinPouch in August 2017, little did we know that it will be compromised only a few months from then. Their launch press release positioned them as a wallet with the most secure mobile Blockchain experience possible.
“CoinPouch was born from seeing the need for a secure and user-friendly mobile wallet that supports multiple cryptocurrencies,” said Kirk Ballou, CEO of Touch Titans.
What happened exactly?
All cryptocurrencies on CoinPouch rest on Blockcypher nodes which do not support Verge. Due to popular vote, CoinPouch included Verge in its offering. They contacted chief developer of Verge, Justin to set up a specific Verge node for CoinPouch and it is only this node that has been affected. Few users had highlighted discrepancies earlier on 9th November but a hack possibility was eliminated. When more issues surfaced on 21st November, a bigger probe confirmed a hack.
The stolen coins were moved to a wallet which has been identified – DM5Esw71BnTdJzX1FWpNLvdnrLuCS91v4N
Who is to be blamed?
In an ugly spat between Verge and CoinPouch, series of conversations and data points have been released, blaming each other.
The CoinPouch story can be read in full in their official press release. They kept Justin in the loop right from the beginning and worked as per his suggestions but the hack could not be averted. CoinPouch took a series of security measures to contain the loss even after the hack was officially confirmed. CoinPouch’s twitter handle was last active on 28th November and their last update is as follows:
“We have retained a forensic analysis firm and the investigation is underway. We are waiting for next steps from law enforcement on the investigation. This process is expected to take a while. We will provide updates when we have them.” – CoinPouch
Justin on the other hand, released screenshots of his conversation with CoinPouch and blamed them for not securing the node at their end.
“I blame CoinPouch for the hack. I simply compiled the Verge source code, that’s it. They set up the API and connected the app. What I believe happened is that they did not secure the API at all.” – Justin
Users of cryptocurrency have been debating on this topic ever since. However, they feel that this event has nothing to do with safety of cryptocurrencies. It is possibly an issue specific to CoinPouch. One user pointed out that:
Blaming Verge for CoinPouch is like blaming Bitcoin for MTGOX
Will it be easy to get to the culprit?
Justin was contacted by a user who wants to be anonymous. He said that the identified wallet address where the stolen Verge coins lie, belong to him and he is not a hacker. He transferred the coins from Bittrex. Does it mean that the stolen coins have already been sold to a third party ( user whose wallet is being questioned) via Bittrex and is now being probed for no reason? We will have to wait and watch.
The bigger question is whether the affected users will be reimbursed for their loss.
The 10th December update from Verge’s twitter handle states:
Users affected by the CoinPouch hack should join this thread and get involved in the class action lawsuit that is forming. https://vergefora.com/threads/class-action-lawsuit-against-touch-titans-coinpouch.6/ … #coinpouch $XVG
Verge has clearly distanced itself from CoinPouch and has joined the users, instead.
Where is Verge headed?
Verge is an anonymous cryptocurrency that supports privacy. It uses Tor and i2p to raise the security provided by even Bitcoin’s blockchain. It does not have any pre-mined coins and the open source development is supported by a very active community.
Screenshot of the Verge website
It is not a new currency, in fact it was first conceived in 2014 and was listed under the name DogeCoinDark. It was rebranded as Verge in 2016. Like most other cryptocurrencies, Verge’s supply has been capped. Its maximum is 16.5 billion XVG.
On 21st November, 2017 when this hack happened, one Verge was at $0.005. Interesting the price of Verge was barely affected by the CoinPouch event and has in fact grown manifolds. Coincidentally John McAfee also issued his stance on future coins that may do well, with Verge being one of them.
The surge in price is obviously ill timing for the users that have lost their currency during the attack.
As on 15th December, 2017, Verge has following numbers to back its growth:
- Market capitalization: $272,112,766
- Price of one Verge in USD: $0.0189
- Current rank based on market cap: 54
As per Walletinvestor.com Verge will be up by +118.85% in 5 years i.e. 2022. Their month by month prediction can be found here. Users are betting on it, partially because it is one of the cheapest cryptocurrencies out there. Whether it will keep up with the expectations remains to be seen.
Which wallet should you bank on?
If you want to continue trading or holding Verge and want to know an alternative to CoinPouch, consider their approved list here.