Was Parity hacked? Nearly $300m Ethereum wallet freeze may not have been caused by bug

Last week, popular cryptocurrency wallet Parity confirmed that nearly $300m worth of Ethereum was accidentally frozen due to a bug. However, it now appears that the incident may have been caused by a hack instead of a vulnerability. One of Parity's users, a startup called Cappasity, whose wallet containing around $1m worth of Ethereum was also frozen, claims "deliberate hacking" caused the incident.

According to Parity, over 580 multi-sig wallets and 570 wallet owners were affected by the incident. The firm also confirmed that all its multi-sig wallets created after 20 July were frozen. This means that the funds in the affected wallets, an estimated $280m of Ethereum, cannot currently be moved or be accessible by anyone.

Parity said a single user, known as devops 199 on GitHub, accidentally triggered a bug that caused all the wallets to freeze. However, Cappasity alleges that devops 199's actions were deliberate and malicious. "Our internal investigation has demonstrated that the actions on the part of devops199 were deliberate," Cappasity's founder Kosta Popov said in a statement.

"When you are tracking all their transactions, you realise that they were deliberate. Therefore, we tend to think that it was not an accident. We suppose that this was a deliberate hacking. We believe that if the situation is not successfully resolved in the nearest future, contacting law enforcement agencies may be the right next step," Popov added.

Parity is yet to update users on how its recovery efforts are progressing. Meanwhile, the Ethereum in the wallets remains untouched, The Register reported. However, until Parity successfully resolves the issue, users are unlikely to be able to get their hands on the frozen funds.