IOTA Co-founder Promises To Refund Tokens To Investors Affected by Recent Hack

News / 07.03.2020
  • IOTA founder Sønstebø intends to refund victims of the major February 14 IOTA hack with his own tokens. 
  • The exchange plans to re-enable its network in the coming days to revive IOTA prices.
  • Time will tell whether the Foundation will be able to make strides towards improving the security of its network and wallets.

Towards the end of last week, IOTA co-founder and board co-chairman David Sønstebø revealed on twitter that anybody who lost funds in the recent IOTA [wallet] hack, will get their tokens back. He promised to pay them from his personal holdings. 

IOTA is a startup building a distributed ledger technology called the Tangle, which is similar to the blockchain explicitly designed for the internet of things. 

Unfortunately, the network has been down, with MIOTA token-holders being unable to facilitate any withdrawals or deposits since February 12, 2020. 

This is because a hacker was able to make off with over $2 million from Iota’s native Trinity wallet, causing the project to lose approximately $400 million since the network was turned off.

IOTA has downplayed the severity of the hack, but many in the crypto world speculate that far more wallets might have been compromised than the Foundation has so far admitted. 

Great News for IOTA Users

The tweet from David about the refund of lost funds was greeted with joy by affected users. In refunding lost tokens, the IOTA foundation looks to restore user confidence over its platform as plans are laid down to re-enable the network after 20 days offline. 

IOTA now joins a list of very few exchanges that have gone out of their way to compensate hack victims. 

For instance, back in May 2018, Italy-based cryptocurrency exchange Bitgrail announced that it promises to refund Nano (XRB) tokens stolen in a February hack amounting to $195M, so long as users signed an agreement to forgo any legal action. 

Similarly, on May 7, 2019, one of the largest cryptocurrency exchanges in the world, Binance, was attacked by a hacker or a group of hackers who stole over $40 million in funds from different users’ accounts. 

By using the SAFU funds that the exchange holds for such emergencies, Binance announced it would be refunding users that were affected by the hack.

Does The Future Look Bleak For IOTA?

Since this latest security breach came to light, IOTA has lost over 40% of its value, and it remains unclear what will happen to the token’s price once the network reactivates on March 10.

User confidence could well grow and boost the token value, as IOTA rolled out plans to update their apps via Trinity 1.4.1, a new version that is designed to remove the recently detected vulnerability from the wallets.

IOTA, currently ranked #24 by market cap plummeted by about 1.64% over the first 24 hours following the February 14 hack. The coin is trading at $0.23 at the time of writing. 

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Dacosta Osei-Tutu, a first degree holder in Nursing, who couples his Nursing career with blockchain blogging, has a great passion for the blockchain technology and aims to play a vital role in applying this revolutionary technology to disrupt the healthcare system in Africa.