Parity Technologies, the company behind the Ethereum Parity Wallet, announced that users using multi-signature wallets created after July 20th, 2017, are experiencing a vulnerability that makes it impossible to move funds out of affected wallets.

As a result, this bug froze more than $250 million of Ether, and left many cryptocurrency enthusiasts locked out of their wallets and unable to move their funds to alternative accounts.

It started out on July 20 when Parity rolled out a significant update to fix a bug that enabled a hacker to steal more than $32 million worth of ether from multi-signature wallets.

Unfortunately, the code that updated the system, contained another bug. The problem happened when a regular user with the name "devops199" triggered the flaw by accident.

The user accidentally triggered a function that turned the contract governing Parity multi-signature wallets into a regular wallet address and made him or her the owner. When attempting to exploit a flaw in the source code, the user accidentally removed crucial Parity's library contract and Parity's code.

Realizing what they have done, they attempted to undo the damage by deleting the code which had transferred ownership of the funds. Rather than having the problem solved and returning the money, the attempt simply locked all the funds in those multi-signature wallets permanently, with no way to access them.

Similar to the previous bug, this has affected some ICO projects.

The Polkadot ICO was the one that took the heaviest hit. It was holding over $92 million in Ether in its frozen wallet. Coincidentally, Gavin Woods, who is known as the co-founding team of Ethereum and later Parity Technologies, is also the man behind Polkadot.

According to Parity:

Few weeks before the bug was froze people's wallets, Woods took to social media to express his concerns, saying that Ethereum should probably hold off its Byzantium hard fork as he suspected it might encounter bugs on the way.

However, the scheduled hard fork eventually went without any unexpected interruptions. But after the bug was discovered, the crypto community didn’t miss an opportunity to blame Woods for not paying enough attention to his own product, letting critical bugs fly under the radar.

Ethereum developer Nick Johnson confirmed that a hard fork of Ethereum would be the only way to technically recover the money. Developers have also speculated that it might be possible to reclaim lost Ether using the Constantinople hard fork by implementing Ethereum Improvement Proposal 156.

With many flustered Ethereum enthusiasts rushed to Twitter and Reddit seeking answers from Parity Technologies, as well as the rest of community’s leaders, none were getting the information they need.

Ethereum co-founder Vitalik Buterin took the matter to Twitter, explaining that he will be "deliberately refraining" from commenting on the ongoing wallet problems. However, he voiced his support for "for those working hard on writing simpler, safer wallet contracts or auditing and formally verifying security of existing ones."

Parity Technologies is working on a fix, and has confirmed the issue on its blog and official Twitter account. It informed its users that its developers are looking into the situation, promising to inform the community as soon as more information is available.

And if the worse happens, like if the funds can’t be retrieved, the community can at least hope that Polkadot investors could claim their money back.

Devops199 made an appearance in the Parity chat channel after the incident. "I'm [an Ethereum] newbie… just learning," devops199 wrote.

Another user replied: "You're famous now lol." Devops199 was available for comment about the incident, but then replied, "Sorry… I'm really afraid now… can't talk."