On September 28th 2019, the Fusion swap wallet (0x8e6bDa71f3f0F49dDD29969De79aFCFac4457379) was compromised, resulting in theft of 10 million native FSN and 3.5 million ERC20 FSN token. Investigations so far show that this is the only wallet affected. Furthermore, as of now, there has been no report that other holders’ wallet were impacted.
After the currency was stolen, abnormal wash-trading behaviour occurred, and some of the stolen tokens were sold across exchanges, in particular Bitmax and Hotbit.
The compromise of the swap wallet was due to the Private Key being stolen. The Fusion Protocol and technology itself has been and remains secure.
Remediation Actions Taken:
1. Primary exchanges OKEX, Huobi, Bitmax, Citex, Hotbit have suspended deposit and withdrawal of FSN tokens.
2. All remaining funds in the swap wallet have been transferred to a cold wallet
3. Abnormal transactions are currently being tracked, and there is uncertain evidence showing that theft may have been caused by personnel related to the Fusion Foundation. The Foundation is working closely with exchanges to gather further information and evidence.
4. The foundation is working urgently to recover the stolen currency through technological approaches.
As a concluding remark, the company made a public apology
The Foundation deeply regrets this incident and its impact on the path of Fusion’s innovation. While private key theft is an industry-wide risk and occurrence, we clearly must strengthen the protection around our private keys.
In the face of such a challenge, we ask for unity and support from our community members with each other and for the Foundation, to get through this trial.
The attacker reportedly obtained access to the wallet by stealing the private key associated with it. The author of the post claims that “the Fusion Protocol and technology itself has been and remains secure.”
In an attempt to prevent the laundering of the funds in question, deposits and withdrawals of FSN tokens have been reportedly suspended on cryptocurrency exchanges such as Huobi, OKEx, Bitmax, Citex and Hotbit. All the funds remaining in the token swap wallet were moved to a cold wallet, abnormal transactions are being tracked. Lastly, the Foundation is also working on some unspecified technological approaches to recover the funds.
As of press time, FSN is trading at around $0.174 — over 66% lower than the one it traded at yesterday, according to Coin360 data.
While the breach is serious, the response of the Fusion Networks foundation has been lauded. They have opted for a transparent approach of dealing with the problem. By publicly announcing the breach was a move towards accountability not usually found in the software world. However, there were hints that the breach could have been perpetrated or aided by an insider with access to the information needed to pull something like this off. These statements are unsubstantiated and we may have an update from the company soon.