On September 22, 2018, Crowd Machine, a blockchain startup aiming to create the world’s first global cloud computing service built on distributed ledger infrastructure suffered a severe hack that targeted the company’s crypto wallet and led to the loss of over 1 billion of its native CMCT tokens.
Following the hack, the token suffered a market drop of 87 percent in just a few hours, hitting a low of $0.0019. Writing on September 25, the company’s CEO Craig Sproule has finally reacted to the hack with an update on what is being done to control the damage.
Crowd Machine Background and Controversy
Based in San Jose, California, Crowd Machine has been hailed as a blockchain-based replacement for Amazon Web Services, replacing the centralized model of cloud infrastructure with a distributed system that has no single point of failure. The ‘world computer,’ according to the company’s stated intention would not be subject to the control of any single individual or entity, and it was set for launch sometime in Q4 2018.
The project’s token sale did not progress beyond a pre-sale of CMCT tokens in April 2018 however, and some prominent employees and associates have left the project including former chief of system architecture John Dilley and former project advisor Saeed Al Darmaki. There have been whispers of mismanagement and lack of direction within the company, but none of these claims have been independently verified.
When Saturday’s theft occurred, some commentators accused the company of orchestrating an inside job, an allegation which the company vehemently denies, as it says it is working with law enforcement to unravel the case and recover the stolen assets.
(Source: Crowd Machine)
CEOs Update on CMCT Theft
Crowd Computer founder and CEO Craig Sproule revealed that the company is currently working with law enforcement agencies who have commenced an investigation into the crime. The company, he said, is under instruction to refrain from naming the agencies involved in the investigation or any additional information about their activities which could potentially jeopardize the investigation.
Going further, he revealed that as part of the ongoing investigation, most crypto exchanges have suspended all CMCT trading pairs and that an arrest has been made in connection with the theft, as the company works to recover the stolen tokens.
Advising the general public against potentially buying stolen tokens he said:
“It is highly recommended that no one purchase CMCTs until the criminal investigations have ceased, at which time, we expect closed exchanges to re-open. Purchases of stolen tokens by those not involved with the theft will be honored.”
Concluding, he stated that the company would communicate with the community to confirm when current trading restrictions are lifted. In the meantime, he pledged to keep on updating the community with information about the status of the case as and when authorized to do so by the relevant law enforcement agencies.