Bancor Criticized for Untested Code After $150 Million ICO

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Bancor Criticized for Untested Code After $150 Million ICO

The Bancor Network, a blockchain project endorsed by prominent billionaire investor Tim Draper, recently raised $150 million in an initial coin offering (ICO). However, the development team behind Bancor was criticized for the abrupt extension of investment period and its untested code.

On June 12, Bancor extended the investment timeframe of its ICO by three hours due to supposed attacks on the Ethereum network. The Bancor team stated:

“BNT allocation event minimum time extended TO THREE HOURS due to massive malicious attacks on network & resulting pending transaction bottleneck.”

The majority of the cryptocurrency community immediately criticized Bancor for the extension as early investors who purchased BNT, the native token of Bancor, either attached incredibly high fees or rely on digital finance brokers such as Bitcoin Suisse to ensure the purchase of BNT went through.

“I paid money to be sure I got in via Bitcoin Suisse. Now two more [hours]? Seriously?,” said one of the many early investors who felt that the alterations of the rules of the Bancor ICO were unfair to its investor.

Reputable bitcoin investor and analyst WhalePanda also harshly criticized the controversial decision of the Bancor development team, explaining that the Bancor Network dismissed its early investors by extending the ICO timeframe by three hours.

More importantly, George Hallam, Ethereum-based asset management platform Melonport AG’s head of business development, noted that Bancor did not provide real evidence to prove the legitimacy of the attacks.

Hallam also emphasized that Bancor decided to extend the deadline when its ICO already raised $60 million, which was already a large amount of capital raised for a software company that had not fully completed alpha testing of its software:

“Pretty ridiculous to extend when there was already $60 million raised. Also, haven’t seen any real evidence of actual attacks on the network.”

The status of the Bancor Network regarding technical development was a key discussion point amongst experts and developers including Andreas Antonopoulos and Augur founder Joey Krug.

Almost immediately after the settlement of a $150 million funding round via its ICO for Bancor, Krug stated that the core software of Bancor was tested in Augur’s beta tests a few years back. Krug revealed that Bancor’s vision did not work out in the early stages of Augur and that the market invested $150 million in an untested project.

“Dear God the free market just gave $150M to something we found out didn’t work in practice in the Augur beta,” said Krug.

Antonopoulos brought up a similar point as Krug, criticizing Bancor’s untested code and the sheer overvaluation of its ICO.

Even on its official blog post dated June 11, Bacor Foundation chief technical officer Yudi Levi explicitly emphasized that it plans to run a one-hour minimum fundraiser. Without the three hour extension, the foundation still managed to secure a $60 million investment, which experts argue was more than enough for a company that had not pushed its software through alpha testing.

Still, despite the criticisms, Bancor aims to continue the development and roll out of its software by storing $150 million multi-sig wallets instead of smart contracts to avoid the DAO case in 2016.

“All contributions will be deposited directly into multiple field-tested, industry standard multi-sig wallets in order not to keep too much ETH in any single point of failure. Following the fundraiser, some of the ether will be distributed between several crypto-safekeeping services, again in order to avoid any single point of failure,” said Levi.

Joseph Young

Joseph is a bitcoin enthusiast, financial consultant, web developer writer based in Hong Kong. He has worked with hotels and tech firms in Korea, the Philippines, Hong Kong and Singapore as a front-end developer and has collaborated with venture capital firms to explore bitcoin and virtual reality-focused startups in South East Asia.