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Category Archives: Crypto Heists

Veritaseum and VERI Price Show Resilience in Face of $8.4M Hack and More

The team at Veritaseum, the company, and the price of Veritas (VERI), the token used to access their products and services, have shown resilience despite the theft of an estimated $8.4m of VERI tokens on Sunday June 23, 2017. This and more will be covered in this article, including ways to protect yourself against such heists, while contributing to the success of the crypto movement in general.

Keeping the effect of price weakness in the overall crypto market in mind, the price of Veritas (VERI) shot back up surprisingly fast on Monday (beyond the $200 mark). This was less than a day after about 36k VERI tokens – worth an estimated $8.4m (or about $233 per token at the time) – were stolen from Veritaseum via a breach at a third party.

Reggie Middleton – Founder and CEO of Veritaseum

Photo Credit: Jamaica Stock Exchange (JSE)

Reggie Middleton, Founder and CEO of Veritaseum, reported late Sunday, that two Factor Authentication (2FA) was thwarted on two different accounts, including third party security among other things.

Reggie also remarked that the “…hackers were very sophisticated, although there attempt to hide the VERI by transferring to different accounts was amateur. I don’t want to get into the details of the how it was done so as not to incentivize others, but the attack vector was found and rectified ASAP, which kept the amount stolen to a minimum” (Veritaseum Slack, July 23, 2017).

Masiah Middleton, another valued member of the Veritaseum team, posted: “The amount that was taken from our wallet earlier today was only 36k VERI. Any other VERI being sold was accumulated differently” (Veritaseum Slack, July 24, 2017).

The 36k of stolen VERI tokens were dumped at EtherDelta – one of only two exchanges that have VERI listed at this stage. This was done in a manner that earmarked a deliberate act to cause maximum damage to the price of VERI.

Sell orders were placed far below the market price. The plan of the perpetrators was clearly not to exchange VERI for the maximum amount of Ethereum (ETH). This might explain why Reggie perceived them to be sloppy in their attempts to hide the VERI.

Furthermore, the Veritaseum ICO took place on April 25, 2017 – about 3 months ago. It was not hacked as falsely reported elsewhere.

Reggie also posted the following on July 24th:

“We were hacked, possibly by a group. The hack seemed to be very sophisticated, but there is at least one corporate partner that may have dropped the ball and be liable. We’ll let the lawyers sort that out, if it goes that far.

Although I hate to see assets stolen, and I hate thieves, the incident proved both the resilient demand for our tokens and the utility of the decentralized exchange EtherDelta.

The hacker(s) made away with $8.4M worth of tokens, and dumped all of them within a few hours into a heavy cacophony of demand. This is without the public knowing anything about our last traction.

I would like to make it known that we had the option to fork VERI, but chose not to. At the end of the day, the amount stolen was miniscule (less than 00.07%) although the dollar amount was quite material.

Another point that I would like to make clear is that Veritaseum tokens are software that represent our knowledge, advisory and consulting skills, products and capabilities. Without the Veritaseum team, the tokens are literally worthless! If someone were to someone confiscate 100% of the available tokens, all we need to do is refuse to stand behind them and recreate the token under a new contract. Again, we aren’t selling currencies, we aren’t selling securities. We are selling capabilities, and ability for those capabilities to connect parties P2P for the autonomous transfer of value. You can get away with a large securities heist, or a large currency heist. The Veritaseum team is what powers the value behind the Veritas token. A large theft of those tokens after a fork is as valuable as stealing 90M empty plastic cups.

The “market cap” as the media likes to refer to, may seem high to those who don’t understand how we employ platform economics, but those who understand should see that number as drastically undervalued. We have a roadshow for the NYC & Connecticut hedge funds next week. The Sr. partner of distressed credit of one of the world’s largest funds specifically took the meeting after hearing about what we are doing. “This is big, very big” (that is an exact quote from the person who arranged the meeting, who is a 40 year veteran of Wall Street, a literal brand name know by nearly every experienced professional – someone who had aggressively jumped on board team Veritaseum to assist in business development), for we are simultaneously lining up private and sovereign credits to Veritize. This is in addition to what may be our final meeting with one of the world’s top ten securities exchanges to use our product. That is in addition to our Veritizing a medical practice as a showcase for doctors and healthcare biz pros around the world to emulate (using Veritas, of course). Think of us just capturing 50 basis points of all of the medical practices and related healthcare businesses in the world. Which will actually scale exponentially without financial industry dealings (assuming we can capture .02%).

We have already landed the Jamaican Stock Exchange as VERI client just 30 days after the initial token offering. Actually, quite amazing…

Now, you can see how inconsequential the mere hack of a few million dollars” (Veritaseum Slack, July 24, 2017).

“Without the Veritaseum team, the tokens are literally worthless!”

Some took offense at what Reggie posted. All he meant is this: If you’re going to steal VERI on a large scale (or even all of it!), then the Veritaseum team has the power to simply “…refuse to stand behind them and recreate the token under a new contract.” Reggie went at length to explain why this is the case.

By no stretch of the imagination did Reggie disregard the support of VERI holders. What he posted is hugely positive for VERI holders – the Veritaseum team will have your back even when the worst of VERI heists occur!

Why would anyone go to that much trouble to steal VERI and not want to “cash out” at a maximum level?

The perpetrators not only dumped the VERI in a manner designed to cause maximum damage to the price. Someone launched a massive disinformation campaign shortly afterwards against Veritaseum via various channels.

Now we can at best speculate at this stage, but is it too far-fetched to suspect that state-sponsored actors were involved in this heist of VERI, especially considering the way they gained access and dumped the VERI onto the market? In fact, can one completely exclude the involvement of state-sponsored actors in various other crypto related heists, including the biggest bitcoin heists in history so far?

Let’s assume for a second that certain government agencies launched a secret war on cryptos. Let’s assume their aim is to slowly kill the crypto market by discouraging people to participate. Let’s assume that they attempt this through a combination of legal and illegal acts, including heists via phishing scams and hacks – primarily designed to eat away the confidence of participants in the crypto market. And perhaps more importantly, discourage people from entering the market.

Given restrictive regulations against cryptos within certain jurisdictions, is it too far-fetched to assume that certain government agencies are indeed waging war on cryptos? In addition, is it really that far-fetched to assume that various crypto news sources are within their control, especially given the disinformation and outright lies published at certain sources?

Is it that far-fetched to assume that an army of state-sponsored actors exists with the sole purpose to “bad mouth” or to play cryptos off against each other by spreading fear, uncertainty and doubt (FUD) based on disinformation and lies? Is it really that far-fetched to suspect that cryptos such as Ethereum (ETH), Veritas (VERI) and Populous (PPT) are among their main targets?

Furthermore, why are certain crypto news sources so quick to blame “Russian hackers” when there is a heist of cryptos? In addition, why are there deliberate attempts to come over as racist (e.g. see below)?

Reggie Middleton responds to racist slur posted at BitCoinTalk

Is it that far-fetched to assume that certain governments are trying to roll their non-crypto propaganda campaigns into the crypto space in a multi-pronged approach – hitting both primary and secondary targets in the process (so to speak)?

Source of Video: Let’s Invest

Don’t be surprised when they offer “solutions” to problems they created in the first place. It is all done under pretexts that might come over as “fine and dandy,” but are not. Don’t fall for their tricks. Don’t support their efforts to gain control over the crypto space.

Are you a true crypto supporter? Here are ways to help.

Regardless of whether you deem the above to be purely speculative nonsense or not, there are ways you can contribute, not only to safeguard your own crypto holdings, but to lend support to the crypto movement in general – a movement that seeks to free us for one from the control of central powers through the global embracement of decentralized, peer-to-peer, trustless, bankless, censorship-resistant and open source solutions based on blockchain technologies.

This is what you can do if you haven’t done so already (in no specific order):

Educate Yourself – Arm yourself with the willingness to learn. Be willing to walk the extra mile. If not, be ready to accept unnecessary risks and the potential losses that come with it!

Crypto Hardware Wallets – It is not safe to store your private keys on your local computer. Think Pony botnet. Utilize crypto hardware wallets such as Trezor to safeguard your private keys. No crypto storage solution is 100% full proof, but crypto hard wallets such as Trezor provide almost unmatched convenience and security.

Support Decentralized Crypto Exchanges – Why place your crypto holdings at risk by making use of centralized exchanges? If you do, you’re in effect handing over the private keys of your wallets to third parties. This creates unnecessary counterparty risks.

History in the crypto space has shown that third parties such as centralized crypto exchanges cannot be trusted to keep your private keys safe. Think Mt. Gox. Think Cryptsy. Think Bithumb. Think of numerous other security breaches at centralized exchanges.

Try to avoid centralized crypto exchanges by making use of decentralized crypto exchanges such as EtherDelta (even though the perpetrators used it as a means to exchange the stolen VERI). Don’t fall for cheap propaganda that suggests that EtherDelta is too difficult to use. There are various videos available at YouTube that show exactly how it is done.

Don’t fall for phishing scams by trusting addresses, URLs or messages received via private message or posted by someone anywhere besides on the official website of a company or token. Make use of a solution such as RoboForm in order to make sure that URLs match 100% (or at least use bookmarks).

Do Your Own Due Diligence – Don’t fall for fear, uncertainty and doubt (FUD) driven by disinformation and lies. 

Always keep the bigger picture in mind!