Bitcoin

REX Loses $1.3m in Cryptocurrency ICO Funds due to Coding Error

JP Buntinx | August 25, 2017 | 11:00 am
Bitcoin

REX Loses $1.3m in Cryptocurrency ICO Funds due to Coding Error

JP Buntinx | August 25, 2017 | 11:00 am

Cryptocurrency ICOs continues to make headlines for all of the wrong reasons. A lot of projects suffer from hacks these days. However, in the case of REX, the issue was entirely their fault. The project lost $1.3m in Ethereum due to a coding issue. By providing a misquoted Javascript hex string, the money deposited by investors was sent to an inactive address. This is another validation of how anyone can run their own ICO but shouldn’t necessarily do so. Investors will eventually get their tokens, though.

It seems there is something wrong with at least one cryptocurrency ICO every week. Last week, a project’s pre-ICO page was hacked, effectively defrauding investors. This week the REX team announced they had a major bug in this smart contract as well. By using an incorrect Javascript hex string, 6,687 Ether was sent to an inactive address. As the team doesn’t have the private key for this wallet, investors are effectively screwed out of their money. Or they would be, but it looks as if things will sort themselves out eventually.

REX Team Screw up ICO in a Major Way

More specifically, the missing funds still sit in the wrong wallet, mind you. However, the REX team has raised $1.3m in other funding to issue these tokens to investors regardless. A strange development, to say the least. If they can cobble together $1.3m so quickly, why is there a need for an ICO in the first place? Regardless, the investors will receive the tokens they originally paid for. It’s not their fault the team messed up their ICO so badly, after all. For a real estate platform startup, one wouldn’t expect these issues to happen.

Misquoting sensitive information during the fundraising stage is disastrous. It doesn’t bode all too well for the future of this project either. After all, no one in their right mind will use a company incapable of doing things right at such an early stage. The real estate sector is quite competitive already. Any company messing up will not be around for long in this particular industry, that much is evident. Then again, REX promises to do something rather unprecedented. Connecting vendors, buyers, and agents through a free global system sounds pretty interesting.

Unfortunately, this is yet another example of how cryptocurrency ICOs can be quite dangerous. Not just for the project looking to raise money, but also for investors. In this era of smart technology, it only takes a human mistake to cause significant damage. That is once again what we see in the case of REX. We can only hope their future coding skills are more on point. If their global networking system has some bugs, the project will be over before it gets off the ground.  It does appear the issue is resolved now and funds are trickling in once again.

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