Friday, February 3, 2023

What’s Going on with the MyEtherWallet – MyCrypto Takeover?

What’s Going on with the MyEtherWallet – MyCrypto Takeover?

A rift between the founders of popular Ethereum service MyEtherWallet caused confusion among users this week. Some suspected the project’s official Twitter account was compromised when it suddenly changed name to “MyCrypto”, bringing all followers with it. However they soon found out it was in fact the same product, with most of the old development team forking the project and rebranding. Meanwhile, the original MyEtherWallet (MEW) project is continuing with its name and user base — but without the registered company underpinning it.

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MyEtherWallet Well Known to Ethereum Users

While it’s now clear the two original founders parted ways and will now develop their separate visions for the project, the messy way the split was revealed — plus some obviously-omitted details from each side’s official story — caused some users to lose trust.

MyEtherWallet logoMyEtherWallet started in 2015 with co-founders Kosala Hemachandra (a.k.a. “kvhnuke”) and Taylor Monahan (a.k.a. “tayvano”). The ETH wallet and smart contract interface grew rapidly from there just as Ethereum itself did. MEW created a popular withdrawal tool after TheDAO hack of 2016, and user numbers exploded in 2017 as Ethereum was used to launch a string of wildly lucrative ICOs.

MEW is the official ETH interface for both Trezor and Ledger hardware wallets, and interacts with other well-known services like Jaxx, Geth and Parity. Users must keep/secure their own private keys, with their MEW password encrypting them to access the service.

MyEtherWallet ‘Rebrands’ as MyCrypto – but Not Really

The confusion started for most on February 9th, when the @MyEtherWallet Twitter account with 80,000+ followers suddenly changed name to @MyCrypto, and posted suggesting a simple rebranding:

Needless to say, people freaked out — not least because the official MyEtherWallet site remained unchanged and carried no mention of a renaming. Given the proliferation of crypto-related account hacks, fake profiles and phishing attacks on Twitter, users sensed something fishy.

Monahan later confirmed MyCrypto was indeed real, posting explanations on Medium and her personal Twitter account, and signing it with her Keybase account. Hemachandra posted a response with his own version of the story on Reddit a day later.

The Clear Parts

What is clear from the official statements, LinkedIn and social media profiles is this: Both MEW and MyCrypto still exist, offering almost-identical services since MyCrypto is a relabeled fork of open-source MEW — for now. At least 10 MEW employees, including Monahan, now work at MyCrypto — while three remain (including Hemachandra) with MEW. Hemachandra confirmed on Reddit that the majority of employees left for MyCrypto. MyCrypto’s FAQ post on Medium says it has 20 employees.

MyCrypto logoBoth teams have posted all the usual platitudes about continuing to offer innovation, quality and security.

MyCrypto (for now) has MEW’s 80,200 Twitter followers, while @MyEtherWallet has a new account with roughly 5,000 followers. Hemachandra’s “kvhnuke” handle retains the MEW Github repository, domain name, AWS instances and social media accounts with the MEW name (not including the rebranded Twitter one).

Since wallet users keep their own private keys they may theoretically use either service the same way (even with a Trezor or Ledger), however those third-party service still recommend the MEW-branded version.

The Not-So-Clear Parts, and Lawsuit

What’s less clear is the initial reason for the split, which seems to have happened around mid-2017, and appears to be acrimonious. Monahan only subtly referenced it in her Medium announcement, while Hemachandra said only “Alas, for reasons I cannot delve into here, our partnership had to end.”

Thickening the plot is the existence of a lawsuit between the two founders, filed December 14th 2017, in which Hemachandra is petitioning Monahan to compel her to reveal vital company records.

Lawyer Badri Natarajan (who is not connected to the case and claims to not know either party) posted his own analysis of the situation. MyEtherWallet was registered as a limited-liability company (LLC) which has since been dissolved by Monahan, who possesses all the company’s financial and registration records.

The records show the two were negotiating to hand full control of MyEtherWallet LLC to Hemachandra for $1 million USD, but that he needed to see full financial records before negotiating further. Monahan apparently refused access, and Hemachandra filed the petition to demand copies.

MyCrypto court Doc
A screenshot of Hemachandra’s petition filing

He Said, She Said

Bitsonline has reached out to MyCrypto and Hemachandra through various online channels for comment.

There were a few subtle digs at Hemachandra and MEW in Monahan’s Medium post. Screenshots of Github contributions showed higher and more regular numbers from Monahan, with her almost the sole contributor to the codebase after June 2017. A paragraph in her post also mused that the original MEW website could become untrustworthy:

MyEtherWallet will continue to be online until it, for whatever reason, is not online. As we do for a number of products in this space, if we at any point determine the domain to be compromised, serving malicious code, or otherwise detrimental to the community, we will do what we can to warn the community and prevent use of that codebase and website.

For his part, Hemachandra noted that he created and released the initial version of MEW, bringing in his “friend, Taylor M. on board” at a later date. On Twitter, he hinted the rebranding of MEW’s Twitter account was “unlawful”:

Who Was Right, and Who’s the ‘Real’ Wallet Now?

Online reaction to the situation have been mixed from various sectors of the community. Taylor Monahan (tayvano) received hostile responses on both Twitter and Reddit, and even 4chan — mainly due to the sudden name/branding change and lack of clarify, which some saw as reckless or even deceptive.

A tweet supportive of MyCrypto and Monahan by Boost VC co-founder Brayton Key appears to be deleted. However Key has retweeted other posts that appear to take her side, including this one:

The case highlights the complex details and “ownerships” involved in a project and what becomes of them when they split. As well as the legally-defined aspects like registered names, IP, and bank accounts, there are the intangibles like reputation, social media support, and user/employee loyalty.

How should companies handle a split in a way that retains user trust? Let’s hear your thoughts in the comments.

Images via MyCrypto, MyEtherWallet, Twitter, court docs

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