EtherDelta

In the wild, unregulated frontier of cryptocurrency, December 20, 2017, marked another bruising chapter as EtherDelta, a decentralized exchange celebrated for its vast array of altcoins, fell prey to a sophisticated phishing attack. Known for listing tokens fresh from initial coin offerings (ICOs) and its user-friendly, verification-free crypto-to-crypto trading platform, EtherDelta processed roughly $11 million in daily volume, ranking among the world’s top 75 exchanges, per CoinMarketCap. Yet, its open design became a liability when hackers hijacked its DNS server, redirecting users to a near-perfect replica of the site, devoid of its chat button and Twitter feed, as EtherDelta urgently warned via Twitter.

The heist, unfolding between 1:40 p.m. and 8:00 p.m. ET, saw the attacker siphon 308 ETH—valued at approximately $244,000 at Ethereum’s per CoinGecko—alongside a trove of ERC20 tokens, potentially worth hundreds of thousands more, according to Mashable and CCN. Unlike centralized exchanges like Bithumb or Youbit, which crumbled under similar 2017 attacks, EtherDelta’s decentralized structure mitigated the damage. Operating without a central reserve, it relies on peer-to-peer trading and Ethereum smart contracts, leaving users in control of their private keys. This forced the hacker to resort to deception, capturing keys only from those who manually entered them on the fake site. Users with Ledger Nano S or MetaMask wallets, which safeguard keys, remained untouched, as did funds held in smart contracts, per CCN. EtherDelta suspended services, restoring the site by December 22, but not before the hacker funneled funds to multiple addresses, as traced on Etherscan.

The breach, linked to Anthony Tyler Nashatka and Elliott Gunton by a 2019 U.S. indictment, ultimately cost users at least $1.4 million, with $600,000 stolen from hundreds between December 19-21 and $800,000 from one individual, per the U.S. Justice Department. In 2017’s regulatory void, no immediate recourse emerged, and EtherDelta’s later SEC troubles for operating an unregistered exchange compounded its woes. The hack, a stark reminder of phishing’s potency even against decentralized platforms, spurred calls for robust DNS security, user vigilance for site anomalies, and broader adoption of secure wallet solutions to fortify the crypto ecosystem’s defenses.