December 13, at 8:27 pm Beijing Time, due to human error and the mismanagement of the private key by our staff, the VeChain Foundation buyback address was compromised.
After a responsive investigation, the incident was caused by the fact that the private key of buyback address was stolen during the wallet creation process due to the negligence of the staff member. The security integrity of the mainnet and our official mobile wallet had not been affected in any way or form.
Approximately 1.1 billion VET tokens in this address were transferred into 0xD802A148f38aBa4759879c33E8d04deb00cFB92b, this individual address. All the addresses associated with the said address have been tagged on VeChainStats, the list is automatically updated as soon as the thief sends any funds from the original thief’s address.
VeChain Foundation has been tracing the transfer of these VET Tokens in real-time and has taken several steps as outlined below to contain the situation.
The security of VeChainThor network and wallet is intact and sound.
We have notified all exchanges to monitor, blacklist and freeze any funds coming from the thief’s address and any withdraws from the corresponding exchanging wallets. We have paid special attention to the few exchanges which the thief had sent funds to.
We have launched an investigation into every fact around the address to determine the motive, method, and data flow behind this malicious act.
We have narrowed down the possibilities enough to lead to a highly probable theory. Security breach was most likely due to misconduct of one of the team members within our finance team, who have created the buyback account without thoroughly obeying The Standard Procedure approved by the Foundation, and our auditing team did not pick up this misconduct, due to human error.
We would like to emphasize that the incident is in no way related to the effectiveness of the actual Standard Procedure or VeChain’s hardware wallet solutions. And the responsible person without following full compliance will hold the accountability and consequences of internal management actions.
We have enlisted the assistance of Hacken along with its whitehat community, and vechainstats.com teams to help with monitoring and containment of the situation. Their expertise in blockchain data management and cybersecurity will be of help to our efforts.
We have also started a security check immediately on the other crypto assets under the custodian of the Foundation, to make sure no further breach will occur.
We have reported this incident to law enforcement in Singapore.
We will continuously monitor the situation and work diligently with cybersecurity and law enforcement professionals to add more clarity to the situation and mitigate as much as possible.
This is an initial update to inform VET token holders of our current situation. A more detailed account of the event will follow once we gain more clarity.
On December 3rd — 4th, 2019, the General Council of Anhui Tea Industry Association, namely the Forum of Poverty Alleviation in Yuexi County (a county under the jurisdiction of Anqing City, Anhui Province, China), was successfully held. At the forum, VeChain signed a partnership agreement with Anhui Tea Industry Association to accelerate the development of tea industry across the province by leveraging the VeChainThor blockchain technology. Mr. Tian Xinli, Project Director at VeChain, used the opportunity and presented to forum attendees, including government officials and industry experts, with several use cases regarding the VeChainThor Blockchain in powering the tea industry.
With a population of 62 million, Anhui is the 8th most populous province in China. The total GDP of Anhui Province is ranked as 12th highest of all provincial regions in 2017, and it is a major agricultural region and important tea production base. According to the General Office of the People’s Government of Anhui Province, the gross value of tea industry in Anhui is estimated to reach $7.1 billion by 2020. (News Source: Xinhua.com ). The tea industry is undoubtedly set on the fronts of poverty alleviation in the province, as many locals are engaged in the tea trade, often from the lower ends of the income bracket.