Stellar and Ripple Hacked: Justcoin to the Rescue

On October 11, a Justcoin digital currency exchange user posted XRPtalk that they had received an email from the Justcoin team alerting them of a hack due to the vulnerability of its tfPartialPayment feature. On October 8, an unknown 3rd party had exploited the systemic flaw in the way Ripple and Stellar handled transactions gaining them access to the platform’s hot wallet-stored funds.
‘Dear Justcoin user,
You are receiving this email because you have a balance of XRP at Justcoin. XRP deposits, withdrawals and trading have been disabled for the last three days. This is an explanation of what has happened and what the status is.
A network-wide weakness in how both Ripple and Stellar communicated transactions was exploited by an unknown third-party to to deposit false IOUs through Ripple/Stellar to Justcoin. These were consequently withdrawn to their own payment networks as native currencies. The result was that our hotwallets were emptied. Most of our customers’ funds is in cold storage but the amounts were still significant. Justcoin will not operate as a fractional reserve and therefore we decided to lock down all services affected until we had a solution ready.’
The full length letter can be found here.
The experts, the real thought leaders like Gavin Anderson, have been warning Bitcoin users that Bitcoin is still a ‘work in progress’ and as such is subject to failures. We have seen more than a few in the last 18 or so months as the price volatility reflected these growing pains.

This post was published at Coin Telegraph on 2014-10-14.