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

A really intricate situation happened between Australian and Singapore companies
07 June 2018   1994

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. 

SEC to Unveil New List of Probable TON investors

One investor in this list is a ex-member of the managing board of the Bitcoin Foundation and partner of Ribbit Capital Mayer Malka
27 January 2020   462

Some names of large investors and the names of investment companies that could take part in the $ 1.7 billion token sale of the Telegram blockchain project became known, CoinDesk reportes with reference to documents issued by the US Securities and Exchange Commission (SEC) in the framework of the current proceedings.

One such investor is a former member of the managing board of the Bitcoin Foundation and partner of Ribbit Capital, Mayer Malka. He during the testimony at the beginning of the month mentioned Telegram CEO Pavel Durov.

Answering a question about whether Telegram is known for investors who can take on the role of validators in the TON PoS blockchain, Durov said:

We didn't put together a separate list of the purchasers who we would assume have experience in validating other networks, although it was obvious that certain investors… such as, for example, Micky Malka that we have discussed earlier, might… have experience in these processes of validation or at least were closely affiliated with parties that had experience in such processes.


Pavel Durov

Telegram CEO

In addition, Telegram Vice President Ilya Perekopsky, in one of his reports, named David Jan, the founder of ABBYY, a linguistic solutions development company, among potential investors. According to the correspondence published by the SEC, Ian asked Perekopsky if he could get an allocation in the ICO if he contacted Telegram directly without intermediaries in January 2018. “100 percent,” replied Perekopsky.

Also, TON investors could become the American funds Kleiner Perkins, Fortress, Draper Dragon, Dragoneer, DRW Holdings and Redpoint. This follows from the testimony declarations affixed by the SEC to the recent petition. In eight declarations, TON investors explain what prompted them to purchase Gram tokens. Company names have been removed from all documents, but they have remained in the file names. Sources familiar with the situation confirm that they really could take part in the ICO.

Most of the witnesses interviewed by the SEC indicated that they were interested in the possibility of supporting the Telegram project in the ICO TON, while the messenger itself does not accept funding for its main business. The announced investment amounts are on average $ 5-10 million. At the same time, Kleiner Perkins was initially offered an allocation of $ 15 million, but the company managed to agree on a twice as large investment, it follows from the submitted documents.