The deal between the Australian company Byte Power Party and the Singapore company Soar Labs began to break with the disappearance of millions of Soarcoin tokens. Soar Labs tried to buy a stake in Byte Power without paying for it.
It all began in June 2017 a month before ICO Soar Labs. Byte Power announced that the Singapore company will acquire a 49% stake in exchange for $ 5 million. Soar Labs paid a total of 100,000 Fiat and sent 306 million Soarcoins valued at $ 0.016 to pay off the balance.
It seemed that everything was fine, until a significant part of the tokens were frozen in January. Soar Labs said that the digital assets were frozen, because Byte Power was trying to sell tokens at an inflated price to pay off existing debts. In total, 179.2 million Soarcoins belonging to the company were blockchain and 34.6 million were owned by Alvin Fua, the CEO of Byte Power.
The following month, Byte Power filed a complaint with the Australian Securities Exchange (ASX) on the fact that Soarcoins valued at $ 6.6 million were withdrawn from their electronic purses.
Details of the incident were not disclosed, but it is known that Nicholas Weaver discovered a breach in the Soarcoin smart contract. The code allowed the issuer to withdraw its tokens at zero cost. Not only did Soar Labs do this with Byte Power markers, they control the means of any token holder.
The CEO of Soar Labs Seth Lim did not deny the existence of this loophole. He argued that the code is available to everyone, and the responsibility for its verification lies with Byte Power.
Neo Wenyuan, technical director of Soar Labs, explained why the zero transaction is not a breach:
“The zero transaction function, which is displayed in the public source code, was developed for airdrops, transaction monitoring for both Soarcoin and future developments, such as a payment interface for payments in an online application.”
Last month, Byte Power announced that it was able to negotiate with Soar Labs, which violated the earlier agreements. The Singapore company will return the assets that it acquired, as well as pay compensation in the amount of $ 1.7 million and 5 million Soarcoins. In the future both companies will work independently.
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