A malicious coding attack on Zerocoin created 370,000 fake tokens which perpetrators sold for over 400 Bitcoins ($444,000), it has emerged.
In an announcement on Friday, the Zerocoin team made it known that a single-symbol error in a piece of code “allowed an attacker to create Zerocoin spend transactions without a corresponding mint.”
Over a period of several weeks, the “highly sophisticated” criminal party created fake Zerocoins and sold them using multiple exchange accounts to avoid raising suspicion.
The announcement continues:
“We estimate the attacker has created about 370,000 Zcoins which have been almost completely sold except for about 20,000+ Zcoin and absorbed on the market with a profit of around 410 BTC.”
The episode nonetheless had an appreciable effect on Zerocoin itself, with its price and market cap rising.
In an uncommon move, developers have opted not to destroy any coins or attempt to reverse what happened with the newly generated ones.
Instead, a release will circulate to exchanges, whereupon trading will continue as before.
“Despite the severity of the hack, we will not be forfeiting or blacklisting any coins,” they confirmed.
Zerocoin is a project designed to add increased anonymity to Bitcoin transactions, operating within the Bitcoin network.
Even the best-fortified realms of crypto can fall victim to smart criminals at a moment’s notice. Hardware wallet KeepKey even had its data records breached on Christmas day and offered a 30 BTC reward for information leading to the hacker’s capture.