VeChain Wields Axe After $6.45 Million Token Theft

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VeChain has reacted in the strongest possible way to the theft of 1.1 million VET ($6.45 million) in a hack last week, with its Chief Financial Officer (CFO) stepping down and CEO Sunny Lu forfeiting 50% of his salary for 2020. The damage, which VeChain says “has been successfully contained as of now”, has clearly had repercussions throughout the team, which is perhaps not surprising given the level of partnerships VeChain has, and its ambitions.

VeChain Blocks Wallets

VeChain released an update on Sunday, detailing their response to the hack and how they dealt with the aftermath, stating that the experience was “stressful for the entire VeChain team”. Once the hack had been revealed, data analysts VeChainStats were able to trace the outflow of tokens and work with exchanges to limit the inflow into their platforms. However, as VeChain explains, the hackers soon upped their game:

…the thief escalated the action in the next few days, such as creating thousands of new wallets with small amount of tokens to wash the stolen funds and launching DDoS attacks to VeChainStats’ blacklist and etc., which made us think we need to take more decisive measures to contain the damage and more importantly to win more time for investigation and collecting community feedback.

Soon after this, a vote was taken by all VeChain Authority Node holders to block all these addresses, resulting in 469 addresses holding some 727 million VET tokens ($4 million) being blocked from transacting. VeChain will next take a vote on whether to burn the 727 million tokens forever, thus reducing the circulating supply by 1.3%.

VeChain Gets Serious

Of more significance is the decision by the Jay Zhang, the head of the finance team where the mistake was made, to step down, despite having nothing personally to do with the procedural error. CEO Sunny Lu will also “forego 50% of his compensation for the entire year of 2020” in the wake of the hack, displaying a sense of sacrifice not found in many other projects. These incredible acts of self-sacrifice did not go unnoticed by the community:

In taking the steps it has, VeChain has shown that it takes these sorts of events extremely seriously, which will increase its standing in the industry once the furor has died down.