Cryptocurrency Trading App Taylor Loses US$1.5M In Hack; Considers “Survival Fund Token Sale”
Taylor, a cryptocurrency startup developing a trading app, was hacked out of more than 2,500 ETH, or approximately US$1.5 million, in addition to 7% of the total supply of its own TAY token, the company said on May 22.
According to the official statement, the only tokens that remain are those in the Founders’ and Advisors’ pool that have been held in an inaccessible vesting contract.
The heist has put the project in jeopardy leaving the company with no other choice than either stop the project all together, stop working full-time on it, get funded by an angel investor or venture capital (VC) firm, or launch a “survival fund token sale,” the company said in an update on Saturday.
“It turns out we have been hacked and lost almost all of our funds. We now have only about US$25,000. To be honest, it doesn’t even pay this month’s bills,” Fabios Seixas, co-founder and CEO of Taylor, wrote. “This incident forced us to stop, step back and think about the future.”
Getting funded by an angel or VC “is not what we wanted at the current” but “may be a good option now,” Seixas said. “But this is a long roadway. We may not get a deal for months. Meanwhile, we may not be able to keep building the product.”
Seixas said the preferred option was to conduct another token sale with the remaining 2 million unsold TAY tokens.
“Since we will have to issue a new token, we can try to sell, privately or publicly, at least part of these remaining tokens to create a survival fund. Of course, the terms of the sale must be discussed, but since it wouldn’t change the total supply, we don’t think it would negatively affect the token economics.
“We already have all the systems and smart contracts done; therefore it would be technically easy to do it. If we decide to go for a private sale, it would be even easier. This way we will be able to keep running with no interruption.”
Seixas said the goal for both funding options was to raise enough money to support the project over a period of 12 months. “This time frame should be enough to release the app, acquire the first users, start gaining some traction and generating revenue,” he said.
The team is still investigating the heist but evidences suggest that the perpetrators are the same that hacked CypheriumChain out of more than 17,000 ETH, or nearly US$10 million in March.
The hackers collected the funds from multiple sources in a single wallet before transferring them to a larger one in which CypheriumChain’s funds ended up.
Taylor raised over US$1 million in its token sale earlier this year. The company has been developing a “smart cryptocurrency trading assistant” that monitors major exchanges and performs technical analysis to find investment opportunities.