Bancor Defends ‘Decentralized’ Claim After $13 Mln Hack

Bancor Defends ‘Decentralized’ Claim After $13 Mln Hack

Exchange News
July 21, 2018 by Ian Moore
1362
Swiss decentralized cryptocurrency exchange Bancor has come under heavy criticism following a recent hack in which the exchange reportedly lost $23.5 million worth of cryptocurrencies. However, Bancor noted in an update on the matter that it was able to reduce its loss by $10 million after freezing the stolen 3.2 million BNT tokens using a feature
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Swiss decentralized cryptocurrency exchange Bancor has come under heavy criticism following a recent hack in which the exchange reportedly lost $23.5 million worth of cryptocurrencies.

However, Bancor noted in an update on the matter that it was able to reduce its loss by $10 million after freezing the stolen 3.2 million BNT tokens using a feature installed in the Bancor protocol. This ignited a fresh debate on the exchanges’ claim of decentralization.

A Twitter user by name Jackson Palmer noted:

“The key thing here is not the hack itself – It’s the fact that Bancor team had the ability to freeze funds. How many other “decentralized” DApps have a built-in kill switch that is centrally controlled?”

Litecoin founder Charlie Lee also noted in a Twitter post:

“A Bancor wallet got hacked and that wallet has the ability to steal coins out of their own smart contracts. An exchange is not decentralized if it can lose customer funds OR if it can freeze customer funds. Bancor can do BOTH. It’s a false sense of decentralization.”

Speaking to Youtube Channel Crypto Zombie, Bancor Head of Growth Omri Cohen defended the exchanges’ claim of decentralization while addressing the recent FUD surrounding the Bancor hack.

 

Ayal Hertzog, a product architect at Bancor, further noted in a medium post that decentralization is not the actual goal but only a tool to usurp power from financial service providers who have monopolized the financial markets.

Hertzog went on to explain why BNT is decentralized, using the widely known three points:  open-source code, transparent database, and self-sovereign authentication.

 


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