$150M in Ether frozen upon discovery of vulnerability
Parity Technologies, a virtual currency wallet company, recently disclosed a major security vulnerability of multisignature Ethereum wallets that could result in massive theft or loss. A user accidently wiped out the library code, which contained the logic for multisig contracts, thus freezing 600,000 Ether (valued at approximately $150 million), according to multiple reports.
The issue began when Parity discovered that it was possible to turn the Parity Wallet library contract into a regular multisig wallet and become an owner of the wallet by calling the initWalletfunction. A user accidentally performed this task on Nov. 6, in turn destroying the wallet and the library code. Parity has claimed that no coins were lost or stolen.
The roots of this disaster go bak to July, when hackers exploited a vulnerability and stole $30 million worth of Ether. Parity upgraded the wallet, but either failed to detect or neglected to fix the current problem.