Gatecoin, a digital currency exchange platform that had faced a hacking incident earlier this year, is planning to make a comeback on August 17, 2016.
The Hong Kong-based exchange experienced a security breach on May 13, leading to a reported loss of about $2 million in cryptocurrency deposits. In a blogpost published last week, the platform confirmed losing 250 BTC and 185,000 ETH tokens during the hacking incident.
Gatecoin will start operating in a limited capacity from next week. Customers on the platform will be allowed to trade and transfer BTC, DGD, DAO, REP, EUR, USD, and HKD. All trades executed till September 1, 2016, will not be charged any trading fee. Those holding DAO and REP balances on the platform will only be allowed to withdraw and trade their digital, currency assets respectively until further notice.
Gatecoin’s Ether Debt
A compensation mechanism has been set in place by Gatecoin to reimburse customers’ losses to some extent. Once the platform opens for business, customers who have lost Ethereum during the incident will be allowed to withdraw 10 percent of their original holdings, while the remaining amount will be compensated with Ether Debt (ETD). The Ether debt will be settled over time as the platform builds liquidity through investments and regular operations.
Gatecoin reportedly has an ETH reserve of less than 25000, which will be enough to settle 10 percent of the losses, while maintaining a small buffer amount to account for any errors in transactions. The company is also raising funds from investors to compensate its customers. Gatecoin has already raised $500,000 from a Japanese investment firm, and is currently engaged in talks with multiple investment sources to raise the remaining amount.
Ethereum Classic to Come Soon on Gatecoin
Within a month of its relaunch, Gatecoin has plans to introduce new cryptocurrency tradable assets, including Ethereum Classic. Customers with Ethereum balance on the platform prior to hard-fork will also be allowed to split and withdraw ETH and ETC before the ETC trading feature is announced. Those with balances over 10 ETH at the time of security breach will be eligible to claim free Ledger hardware wallets from Gatecoin.
As the investigation into the hacking incident continues, Gatecoin has introduced new security features to prevent similar incidents from reoccurring. Some of the security features include new servers and hosting service with the auto-updating feature. The company has also set up additional firewalls at the server provider level, which when combined with round the clock monitoring and regular penetration testing makes the platform almost impenetrable. The company has also redesigned its multi-sig wallet systems and updated its system architecture.
These hacking incidents involving Gatecoin and Bitfinex has got all digital currency platform reevaluating their existing security features to ensure that there are no vulnerabilities that can be exploited by hackers. Fortunately, the former’s losses are significantly lesser than that of Bitfinex, allowing it to bounce back into business within months. The company is also expected to settle debts much faster than Bitfinex.
Ref: Gatecoin | Image: NewsBTC