The IOTA Foundation has turned off the network after several Trinity wallet users had their funds drained. As per the announcement, most of the infected devices are running the Windows version of Trinity, and the attack is believed to be ongoing. IOTA Foundation has been criticized for its actions, claiming IOTA is a decentralized network and possessing the power to turn its network off at will, February 14, 2019.
Panic for IOTA Users
In a sudden announcement, the IOTA Foundation announced the Trinity attack and confirmed the coordinator has been paused. Law enforcement is working with the Foundation to find the root cause of the issue and get the network back on its feet at the earliest.
Most affected users were running Windows while one used Macintosh. Mobile users have not been infected by the bug, and an initial investigation revealed there was no script used in the attack, implying it was likely manual.
Value transactions of IOTA tokens have been halted, whereas data transactions with no monetary value are still enabled. Nevertheless, this is far from a good look for the IOTA Foundation and network.
Foundation Wields Centralized Power
This incident makes it obvious that the IOTA Foundation has far too much control over the network and confirms the DAG is indeed centralized. Hopefully, this should change as the coordicide solution is rolled out.
Cryptocurrency wallets and exchanges have been hacked multiple times for large sums. Mt.Gox, the most notable, never led to the Bitcoin network halting, because a single entity doesn’t have the power to do so.
IOTA has been on the receiving end of criticism from the cryptography and cryptocurrency community for the foundation’s stubbornness and inability to digest criticism. Recently, two co-founders had a public feud that led to one leaking snippet of conversations with the other, following which it was quickly deleted from Twitter.
It is hard to defend the action of turning the network off. When Ethereum did it, the project was hardly a year into existence. IOTA has been around since 2016, raising ICO money in late 2015. For this to happen four years post-launch is an indication of the centralized power the IOTA Foundation wields.