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Zcoin implementation bug enabled attacker to create over 500K Zcoins

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Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#11

Post by austenallred »

belovedeagle wrote: post #8
kondro wrote: post #4

Im curious. Is this actually illegal? Is there any requirement on how valid crypto currency is created? I understand the network could implement a fix and prevent future transactions or even roll back old ones if there's enough desire, that's what democracies are about right? But was there anything illegal about creating and then trading them? A rollback would hurt the exchanges, but if they didn't already have somet…

This could probably be spun as a violation of the cfaa. IANAL, but the practical interpretation of that seems to be "don't do bad stuff using a computer", kind of like mail fraud but worse.

> This could probably be spun as a violation of the CFAA

I'm not sure there's much that couldn't

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#12

Post by sigmar »

TD-Linux wrote: post #3

Note that this is unrelated to Zcash, the zk-SNARKS based cryptocurrency perhaps more known to HN.

People complained a lot for 10% of Zcash going to the founders (in the form of a 20% draw on the first half of mining). But that value and expertise are used to ensure bugs like this Zcoin attack do not occur.

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#13

Post by 07d046 »

kondro wrote: post #4

Im curious. Is this actually illegal? Is there any requirement on how valid crypto currency is created? I understand the network could implement a fix and prevent future transactions or even roll back old ones if there's enough desire, that's what democracies are about right? But was there anything illegal about creating and then trading them? A rollback would hurt the exchanges, but if they didn't already have somet…

I'm under the impression that the general philosophy of cryptocurrencies is that the code is the law. You can do anything that the code will allow you to do, because it's designed so that you can trust the system and not people. It's a small step to say that it's also not the programmers' intent that matters, but the code itself, because it's the code that matters, not people.

(I'm not sure how this relates to courts of law.)

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#14

Post by hueving »

sigmar wrote: post #12
TD-Linux wrote: post #3

Note that this is unrelated to Zcash, the zk-SNARKS based cryptocurrency perhaps more known to HN.

People complained a lot for 10% of Zcash going to the founders (in the form of a 20% draw on the first half of mining). But that value and expertise are used to ensure bugs like this Zcoin attack do not occur.

There is no proof that currencies that have pre-allocations for certain people are more bug-free than ones that don't.

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#15

Post by JumpCrisscross »

sigmar wrote: post #12
TD-Linux wrote: post #3

Note that this is unrelated to Zcash, the zk-SNARKS based cryptocurrency perhaps more known to HN.

People complained a lot for 10% of Zcash going to the founders (in the form of a 20% draw on the first half of mining). But that value and expertise are used to ensure bugs like this Zcoin attack do not occur.

> used to ensure bugs like this...do not occur

Then compensate for that. Create a pool that pays out for each year without vulnerabilities.

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#16

Post by dangero »

kondro wrote: post #4

Im curious. Is this actually illegal? Is there any requirement on how valid crypto currency is created? I understand the network could implement a fix and prevent future transactions or even roll back old ones if there's enough desire, that's what democracies are about right? But was there anything illegal about creating and then trading them? A rollback would hurt the exchanges, but if they didn't already have somet…

I recently spoke at an event where we talked about the crossover of cryptocurrency and the law with a bunch of attorneys present. Many attorneys spoke up during the Q and A to remind everyone that at the end of the day the legality of anything will be decided by either a jury or a judge. It's going to come down to the arguments both sides make, and I think any defense would have a hard time explaining how what they did was legal in the face of the CFAA. Analogies will be drawn to hacking of other systems, banks, etc. How people feel about it culturally will also affect the outcome.

One important distinction to make is that it really is also going to depend on the jurisdiction of those involved. Is the defendant in the US or somewhere else? Who is prosecuting and what are the charges?

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#17

Post by jedberg »

popopobobobo wrote: post #10
seibelj wrote: post #2

> If the attacker managed to liquidate their Zcoins at an average price of $1.25, they may have netted themselves upto USD 750,000. If you are a skilled programmer / security expert / mathematician, crypto currency exploit creation seems to be an extremely lucrative hobby.

Well, same thing goes to paper note forgery.

Except that, for the moment, paper note forgery is illegal but creating "extra" crypto coins doesn't seem to be.

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#18

Post by sigmar »

JumpCrisscross wrote: post #15
sigmar wrote: post #12

Earlier quoted context omitted.

People complained a lot for 10% of Zcash going to the founders (in the form of a 20% draw on the first half of mining). But that value and expertise are used to ensure bugs like this Zcoin attack do not occur.

> used to ensure bugs like this...do not occur Then compensate for that. Create a pool that pays out for each year without vulnerabilities.

If there are vulnerabilities, those vulnerabilities will be exploited. That will reduce the currency value and the value of their 'founders reward'

Re: Zcoin implementation bug enabled attacker to create over 500K Zcoins

#19

Post by bbcbasic »

goatsi wrote: post #7
seibelj wrote: post #2

> If the attacker managed to liquidate their Zcoins at an average price of $1.25, they may have netted themselves upto USD 750,000. If you are a skilled programmer / security expert / mathematician, crypto currency exploit creation seems to be an extremely lucrative hobby.

Indeed. Everything that crypto-currency touches gets an automatic bug bounty. With rewards that are much nicer than limited editions t-shirts.

Depends what side of the reward you are on.
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