The cold storage wallet was stored in a bank safety box

Oct 22, 2018 12:00 GMT  ·  By

In a Medium blog post, Jim Preissler, the CEO of the trade.io cryptocurrency exchange, disclosed a security breach which allows hackers to steal roughly 50 million trade tokens (TIO) worth $7,5 million from a cold storage wallet owned by the company, as first reported by ZDNet.

What makes this hack very puzzling is the fact that, although Preissler says the bank safety deposit box which stored the cold storage devices was not compromised, the hackers still managed to get away with 50M TIO.

"We use industry recommended cold storage which are maintained in safety deposit boxes in banks, along with all corresponding materials. We have confirmed that the safety deposit boxes were not compromised," said Preissler.

The security breach was noticed after trade.io's security team saw a huge transaction going from the company's Liquidity Pool cold storage wallet to the Bancor & Kucoin exchanges which were asked to block all TIO withdrawals and deposits.

Following the incident, TIO will be removed from the Bancor exchange and its trading will also be disabled on trade.io until further notice.

Trade.io is preparing a fork to invalidate the 50M TIO stolen from the Liquidity Pool cold storage

Based on Etherscan records, Preissler also said that out of all the 50M TIO stolen from cold storage about 1.3M already made their way to Kucoin and Bancor wallets.

At the moment, trade.io is considering a fork so that all the 50M TIO will become worthless while also making sure that all customers' tokens are safe seeing that the company can trace all tokens in the exchange's pool.

Furthermore, all Liquidity Pool activity will continue as usual with all exchange users being allowed to join or leave the pool as they wish.

"Due to the cold wallet breach, Jim outlined earlier we are turning off all institutional liquidity to the exchange for TIO pairs. Please cease trading TIO on trade.io exchange and other exchanges offering TIO and notify others to do the same," a notification sent to trade.io's customers says according to a Reddit user. "We are starting preparation on a fork immediately. All legitimate TIO holders will receive a new airdrop, and the existing holders will be unaffected."

trade.io presents itself as "A revolutionary crypto exchange and modern financial services firm focused on blockchain technology, providing the ultimate in security and transparency" and their "goal is to build the fastest, safest, most efficient exchange on the planet."