Incident Overview
Hong Kong bitcoin exchange MyCoin was shot down, taking with it as much as HK$3bn ($386.9m) in investor funds.
MyCoin promised its investors a return of 150% for a few months of locking up 90 Bitcoin at a price of HK$400,000 at the time.
30 people were claiming to be victims of the company's actions petitioned a local member of the Legislative Council, Leung Yiu-Chung.
Some reports stated the company never operated as a genuine bitcoin business at all. Testimonies from customers describe an operation more like a Ponzi scheme that used the veneer of bitcoin trading as its lure.
Customers were never presented with receipts and were led to deposit their newly-acquired coins at a separate site to earn interest.
MyCoin had promised that it would soon be listed on the Hong Kong stock exchange, and according to photos posted online, also operated a bitcoin ATM:
http://news.yibite.com/application/2015/0208/27667.shtml
Incident Report
Protocol Information
Market Context at Time of Hack
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to MyCoin, these are the critical security checks that could have prevented this incident (February 2015).
- Verify all logic paths related to Rugpull are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
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