Byte Power Party Lose $6.6M Worth Crypto Due to Backdoor

A really intricate situation happened between Australian and Singapore companies
07 June 2018   1065

The deal between the Australian company Byte Power Party and the Singapore company Soar Labs 'went south' after the first discovered the loss of several million Soarcoin tokens. Soar Labs tried to get a stake in Byte Power, not paying anything for it. This is reported by CCN.

It all began in June 2017, a month before the ICO of Soar Labs. Then Byte Power reported that the Singapore company plans to buy 49% of the shares for $ 5 million. Soar Labs paid $ 100,000 for the deal, and the remaining amount covered 306 million Soarcoin, which at that time was $ 0.016 per token.

Everything went smoothly, until in January most of the tokens were frozen. Soar Labs said that this was done because Byte Power was trying to sell tokens at a crazy rate to pay off their debts. Totally, the company had 179.2 million Soarcoin tokens at that time, and 34.6 million Soarcoin were from Alvin Foa, CEO of Byte Power, all of which were frozen.

In February, Byte Power complained to the Australian Stock Exchange (ASX) that $6.6M worth Soarcoin tokens had disappeared from its electronic wallet.

Publicly the results of this complaint are still unknown, but in the meantime Nicholas Weaver discovered a backdoor in the Soarcoin smart contract, which allowed the issuer to withdraw tokens with zero commission. Thus, Soar Labs could do this not only with tokens that Byte Power owns - it has enough power to do this with any holder of its tokens.

CEO Soar Labs Seth Lim does not deny the existence of a backdoor. He said that the code was available to everyone, and the responsibility for the oversight lies with Byte Power.

The zero-fee transaction function, which is visible in the public source code, was developed for the purpose of airdrops, monitoring transactions as the developer of Soarcoin and future development activities such as payment interface with online apps.

Neo Wenyuan

CTO, Soar Labs

Byte Power reported that it had reached an agreement with Soar Labs. It dissolves their previous arrangement - the Singapore company will return the shares purchased, and will also pay compensation of $ 1.7 million and 5 million Soarcoin tokens. In addition, both companies will again work independently of each other. 

Malaysia to Issue Law on Digital Currency

Starting from 15.01.2019, organizers of illegal ICO in Malaysia will face up to 10 years in prison
14 January 2019   110

The law on digital currencies and digital tokens of Malaysia will come into force on Tuesday,  The Star reports. From this point on, any citizen of a country who will be found guilty of conducting an unregistered Initial Coin Offering(ICO) or organizing a platform for exchanging digital currencies without authorization may face up to 10 years in prison and a fine of $ 245,000.

Malaysian Finance Minister Lim Guan Eng on Monday confirmed the information that the law enters into force on January 15. It is expected that the relevant legal framework will be fully defined before the end of the first quarter.

In accordance with the new law, digital currencies and tokens are considered securities and are regulated by the Securities Commission (SC).

Lim also noted that the financial instruments described in the law and related activities must first be approved by the SC and comply with all established requirements for securities.

In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors. 

Lim Guan Eng
Finance Minister, Malaysia

According to Lim, SC will now develop regulatory requirements for ICO organizers and trading platform operators.

In November last year, Lim offered to oblige all cryptocurrency issuers in Malaysia to seek advice from the country's central bank.