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What was The DAO hack?
The DAO was an investment fund run by smart contracts on Ethereum. In June 2016 an attacker used a flaw in its code to drain about a third of its ether; Ethereum then changed its history with a hard fork to return the funds, and those who rejected the fork kept the original chain, Ethereum Classic.
What it means for you
Code that holds money can have flaws that let anyone take it, and an audit or popularity does not rule that out. The fork shows that a blockchain's history is final only as long as its community agrees it is.
How it works
The SEC's 2017 report says The DAO, created by the German company Slock.it and its co-founders, sold about 1.15 billion DAO Tokens for about 12 million ETH between April 30 and May 28, 2016. On June 17, 2016 an unknown attacker began diverting about 3.6 million ETH, a third of the total. The hard fork took effect on July 20, 2016, returning the funds to token holders. The SEC found that DAO Tokens were securities under US law, and did not bring an enforcement action.
Source: SEC: Report of Investigation, The DAO (Release No. 81207, July 25, 2017) · checked 5 October 2026
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