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The Crowd Machine (CMCT) wallet was hacked, most of tokens were transferred to crypto exchanges

Crowd Machine is a company, which goal is to build a globally distributed cloud, a sort of Amazon Web Services that would not be subject to the control of a single company or suffer from a single point of failure. According to the company’s website, this “Crowd Computer” is scheduled to be released in the fourth quarter.

Just a few days ago, Crowd Machine was working to build a crypto replacement for Amazon Web Services. However, today the company is experiencing a major break-in.

On Saturday, according to a post by the Crowd Machine team, a hacker compromised the company’s cryptocurrency wallet and stole a large number of the application’s native Crowd Machine Compute Tokens (CMCT). According to Etherscan, the thief appears to have made off with over 1 billion CMCT, most of which were then transferred to exchanges.

“We are working to resolve this issue as fast as we can,” – the Crowd Machine team wrote Sunday, adding:

“Because this matter is currently under criminal investigation, we are unable to make any further comments at this time.”

Crowd Machine

Crowd Machine attracted attention after two developers from Blockstream, one of the most prominent cryptocurrency startups, left to join the project in February this year.

One of those, Ben Gorlick, became CTO, though according to his LinkedIn page he left Crowd Machine in May. The second, Johnny Dilley became chief of system architecture for the new company, although now his LinkedIn page does not list Crowd Machine and the company’s site does not include him as a team member.

Saeed Al Darmaki, a former advisor to the project who quit this month because ā€“ he alleged ā€“ Crowd Machine did not pay him the token compensation he was promised, told CoinDesk that “poor management” by CEO Craig Sproule had prompted employees to leave. He declined to identify the employees to whom he was referring.

There is little information about the current situation in the company, but speculation has swirled, including unsubstantiated allegations that the thefts were an inside job.

The current situation

The stolen coins have been dumped onto two exchanges so far: Idex and Bittrex.

On Saturday, Idex announced on Twitter that it was de-listing CMCT following reports of “suspicious activity.” At press time, Bittrex had also suspended CMCT trading.

Sproule said to Coindesk that a law enforcement investigation was underway and an “arrest has been made.” Though he did not say who had been arrested and declined to specify what law enforcement agencies were involved in the investigation, saying the agencies in question had asked him not to reveal their identity.

As some pointed out on Crowd Machine’s Telegram, Bittrex requires users to upload identification, which may have allowed the authorities to make an arrest so quickly.

In an update on Medium, Sproule recommended that no one trade the tokens until the authorities had finished their investigation. He said that “assets are currently being recovered.”

At press time, the CMCT price is $0,002661 (24,13%), according to CoinMarketcap.