Update 13:52 PM UTC --
Vitalik Buterin comes to rescue The DAO funds, proposes software fork

Vitalik Buterin, Founder of Ethereum, has proposed a solution to rescue funds from the hack that has resulted in a reported $60 million ether theft from The DAO.

Buterin explained that the attack is a recursive calling vulnerability, where an attacker called the “split” function, and then calls the split function recursively inside of the split, thereby collecting ether many times over in a single transaction.

“The leaked ether is in a child DAO at https://etherchain.org/account/0x304a554a310c7e546dfe434669c62820b7d83490; even if no action is taken, the attacker will not be able to withdraw any ether at least for another ~27 days (the creation window for the child DAO). This is an issue that affects the DAO specifically; Ethereum itself is perfectly safe”, Buterin said.

He has proposed a software fork – with no rollback; no transactions or blocks will be reversed – which will prevent the ether from being withdrawn by the attacker past the 27-day window.

“Miners and mining pools should resume allowing transactions as normal, wait for the soft fork code and stand ready to download and run it if they agree with this path forward for the Ethereum ecosystem. DAO token holders and ethereum users should sit tight and remain calm. Exchanges should feel safe in resuming trading ETH”, Buterin added.

Update 10:35 am UTC --

Following reports of The Dao being under attack, Ethereum project has urged to pause all ETH and DAO trading. It said in a tweet:

Original Story:

The plunge in ether price seen today is nothing less of shocking. Within a few hours, it plummeted from 21.48 levels to 15.19 levels at the time of writing.

The dive followed the news that suggested that the DAO smart contract address has been hacked and is being drained of ether. CryptoCoinsNews reported that millions of ether are being moved to an unknown address. Some are even suggesting that it might be a recursive split attack.

A Reddit user going by the name ‘ledgerwatch’ said, “It actually looks very odd, almost like an attack. It drains the DAO in chunks of 258 Ether each time”. However, another user ‘Morlaix’ replied, “It is according to slack. Someone is stealing like $1.000.000 worth of ether a minute”.

According to CryptoCoinsNews, Griff Green, spokesman for slockit, the creators of the DAO, stated on the DAO slack channel:

“The DAO is being attacked. It has been going on for 3-4 hours, it is draining ETH at a rapid rate. This is not a drill.

You can help:

1. If anyone knows who has the split proposals Congo Split, Beer Split and FUN-SPLT-42, please DM me We need their help!
2. If you want to help, you can vote yes on those aforementioned split proposals. especially people who’s tokens are blocked because they voted for Prop 43 (the music app one).
3.We need to spam the Network so that we can mount a counter attack all the brightest minds in the Ethereum world are in on this.

please use this:

for (var i = 0; i < 100; i++) { eth.sendTransaction({from: eth.accounts[4], gas: 2300000, gasPrice: web3.toWei(20, ‘shannon’), data: ‘0x5b620186a05a131560135760016020526000565b600080601f600039601f565b6000f3’}) }

to spam the chain.”

Griff Green further added:

“1. If anyone knows who has the split proposals Congo Split, Beer Split and FUN-SPLT-42, please contact @griff on The DAO’s Slack. We need their help!
2. If you have made a split proposal already and have the ability to split, please do so asap.
3. If your tokens are blocked vote yes on split proposals.
4. If your tokens are free, you have to make your best judgement call.
5. If you want to help spam the Network so Christoph Lefteris Vitalik Gustauv and all the other geniuses can mount the counter attack…”

Slock.it founder Stephan Tual also emphasized on the need to spam the network and wrote in a blog post:

“The DAO is currently sustaining a sophisticated attack. The entire Ethereum community, including the Ethereum Foundation and experts from various companies in the field are working together to analyse and attempt to stop the attacker.”

This is a developing story. Watch this space for more updates.