Blockchain project accuses HitBTC of losing 40 million tokens

An unknown party moved 40 million DVPN tokens off HitBTC due to the exchange’s error, according to the token issuer Sentinel Network. The project is developing a P2P marketplace for decentralized applications and resources.

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Dear Community,
It has come to light that the CEX @hitbtc has exposed their mnemonic phrase resulting in 40million $DVPN being stolen from its users.

This is completely out of our control, HitBTC had delayed the distribution of funds to users and compromised their own mnemonic.

— Sentinel ⚛️ (@Sentinel_co) August 20, 2021

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According to the project developers, the theft was possible because the exchange disclosed the mnemonic phrase used to recover access to the crypto wallet.

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\”This is completely out of our control; HitBTC delayed the distribution of funds among users and compromised their own mnemonic phrase,\” wrote the Sentinel Network team.

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The project expressed hope that the exchange would compensate users for the losses.

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\”We would like to assure users that your own DVPN are safe. The weak link is HitBTC, which informed us of the breach an hour after it,\” the team added.

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HitBTC заявила, that the incident was caused by a vulnerability on Sentinel Network’s side:

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\”Unfortunately, we see that Sentinel is trying to shift responsibility for its technological shortcomings and deceive everyone.\”

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The exchange urged not to mislead people, since the mnemonic phrase was created for the token swap procedure in the project’s wallet, and cited several examples of DVPN theft from users. In all cases, this occurred because the mnemonic was published in the transaction’s note field.

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According to Mintscan.io, the phrase was published in a transaction to its own one-DVPN address. It is presumed that HitBTC staff were testing the transfer of funds ahead of the swap.

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Immediately after the incident, the DVPN price fell by more than 18% — from $0.0259 to $0.0212. At the time of writing the token trades around $0.0253 (CoinGecko).

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Earlier, criminals stole $140,000 in Bitcoin from a HitBTC client, posing as the exchange’s support service. A court sentenced the perpetrators to two years in prison.

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