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SkyCoin Sees Overnight Price Drop Following Crypto Embezzlement Scandal

SkyCoin Sees Overnight Price Drop Following Crypto Embezzlement Scandal

Reading Time: 2 minutes by on June 21, 2018 Altcoins, Bitcoin, Crime, News, Tech
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Skycoin, a community-owned, peer-to-peer internet was robbed by the firm’s marketing arm EVOLAB of 100,000 Skycoins. The discovery was a critical point for Skycoin as it led to a major sell-off, causing Skycoin tokens to cave in price.

Status Update

Skycoin was developed by many early contributors to the Bitcoin and Ethereum network. According to China Money Network, it is “backed by bandwidth, storage, and computational power, it is built to fulfill Satoshi’s original vision of decentralizing the Internet at the hardware level.”

As seen on CoinMarketCap, due to recent events, Skycoins are trading at $6.79 as of June 20, 2018. The price has fallen approximately 50 percent in the past seven days.

Unfortunately, this is not the first time a member of the cryptocurrency community has embezzled funds. Reuters reported that in April 2018, four executives from a South Korean cryptocurrency exchange were accused of embezzling billions of their customers’ funds.

According to the Skycoin Team Status Update, the team acknowledged that multiple factors led to the mass sell-off. They, however, noted that the Chinese marketing team’s actions directly contributed to the token’s decline in value due to the uncertainty of the events. The Skycoin Team have taken active steps to rectify the situation and detail the actual impact on the Skycoin project.

They mentioned in their update that the initial trigger was the discovery that the marketing team had been embezzling the 100,000 Skycoin tokens over the past half year. The Skycoin Team terminated the relationship when the tokens were not returned.

Following the event, nine people, some of whom were apart of the marketing team including, Sam Sing Fong, Mary Li, Xiangdong Yan, and Jesse Sun Fei entered the home of Skycoin’s CEO on June 13, 2018.

The CEO and his wife were held captive for over six hours during which time they were beaten and threatened. The individuals managed to extract 18.88 Bitcoin and 6,466 Skycoins. Skycoins security measures managed to prevent any more tokens from being stolen. The nine individuals also attempted to steal intellectual property from the company like the design framework for the Skycoin network.

Skycoin Ripple Effects Minimized

Skycoin is currently assessing the number of Skycoin tokens stolen by the gang, as the address with the stolen coins is currently being investigated.

Cryptocurrency exchanges that offer the Skycoin token were notified. The team requested the trades temporarily freeze accounts of the suspects. Once the investigation has finished, the team will then deal with any frozen assets. Skycoin has assured their users that they will supply an additional update from the legal team on the aftermath of the robbery.

According to the exchanges, any accounts with access to stolen Skycoin tokens are frozen. Following this security measure, any additional impact should be quite limited. The team has acknowledged that while “panic selling seems to be continuing,” it appears to have recovered 30 percent.

Anyone a part of Skycoin’s online community via their social media accounts or Telegram groups were also advised that the EVOLAB team created these accounts. As such, Skycoin recommends subscribing to the group on the website to remain updated.

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