Nano backed digital asset exchange, Nanex has recently announced that untraceable cryptocurrency, Haven Protocol’s (XHV) failure to inform the former of the latter’s recent updates resulted in the loss of tokens.

In particular, Nanex’s monitoring systems supposedly failed to withdraw XHV, which helped to identify what the actual problem was. When assessing the problem, the Nanex team was quick to notice that the XHV wallet software supposedly did not have an appropriate balance to support withdrawals.

Several verifications have since been made and some of them are said to include confirmation of deposits and matching amounts. Furthermore, the team reported that double spending might have occurred.

An issue that could be tied to this problem, according to the Nanex team, is Haven’s lack of communication. More specifically, they failed to inform Nanex of their updates, namely that of their 3.0.1 wallet update. Hence, due to being completely unaware, Nanex continued to run the 3.0.0 version of the Haven Protocol Wallet.

Cons Of Using An Older Wallet Version

This is where the problem of double spending comes into play, as the user receiving the XHV token in his or her wallet will “report double (or more) the amount of the actual deposit.” This causes a domino effect, as the moment Nanex requests for “new deposits”, the doubled amount appears, which naturally will not come off as a red flag.

Current Actions Taking Place

At the moment, the team involved has reported that they are continuing their checks, as nearly “311,000 XHV was stolen by continuously depositing with the specially constructed transactions and then withdrawing it.” It was also revealed that the attacker responsible for this mess used a residential ISP and has since “sold 126,000 XHV for a total of 20, 762 NANO (currently worth $34,541.12).”

While the two parties involved, i.e. Haven and Nanex, discussed ways to overcome this situation, it has been confirmed that the duo was not capable of arriving to a solid and advantageous conclusion other than forking XHV. Simply put, those who currently hold the XHV token on Nanex, has lost them entirely – unless the U.S law enforcement manages to regain access.

Preventative Measures To Consider

Nanex has also advised current and future token developers that the best solution to prevent the loss of tokens would be to inform the exchange of any updates made. Another preventative measure might include the implementation of “behavior-based risk management”.