Hong Kong-based cryptocurrency exchange CoinEx recently disclosed the astounding news that hackers had managed to steal over $70 million in tokens due to compromised private keys. This devastating security breach has prompted the CoinEx team to take swift action, not only working towards building and deploying a new wallet architecture to restore functionality, but also by establishing lines of communication with the hackers in an attempt to recover the stolen funds.
CoinEx has been forthcoming about the incident, providing Cointelegraph with comprehensive details of their ongoing investigation. While the theft of $70 million worth of cryptocurrency is undoubtedly a substantial loss, the exchange maintains that this only represents a small percentage of its total assets under management. Emphasizing their commitment to customer protection, CoinEx has assured affected users that they will be fully compensated for their losses.
According to CoinEx, the initial findings of their investigation trace the breach back to compromised private keys associated with their hot wallets. These wallets were dedicated to storing exchange assets used for transactions, such as deposits and withdrawals. To mitigate further losses, the exchange promptly suspended its withdrawal service, patched system vulnerabilities, and transferred the remaining assets from the compromised wallets.
As part of their ongoing efforts to minimize the impact of the hack, CoinEx plans to gradually restore its withdrawal service within seven working days. However, the immediate focus of the team lies in the development and implementation of a new, robust wallet system that can securely handle activities within the 211 chains and 737 assets supported by the exchange.
Initial reports from CoinEx indicated that the hackers’ illicit activity began on September 12th with the withdrawal of 4,947 Ether (ETH). Subsequently, they proceeded to withdraw significant quantities of other tokens to the same address. The estimated value of the stolen funds started at $27 million but has since doubled in the week following the breach.
The CoinEx hack has been linked by some blockchain security firms to the notorious North Korean Lazarus Group hackers. Notorious for their involvement in major cryptocurrency thefts, the group has been a significant concern within the crypto sphere in recent years. For instance, the Axie Infinity Ronin Bridge hack in 2022 resulted in a staggering $650 million stolen. According to blockchain analytics firm Chainalysis, North Korean hackers have already stolen approximately $340 million in cryptocurrency in 2023. However, with the CoinEx hack and the subsequent $41 million breach of cryptocurrency gambling platform Stake on September 4th, this figure is expected to rise significantly.
Despite the malicious actions of the hackers, CoinEx remains committed to recovering the stolen funds. To this end, the exchange has established communication channels with the perpetrators, in hopes of engaging in proactive dialogue towards a mutually agreeable resolution. By taking this proactive and unconventional approach, CoinEx demonstrates its determination to bring the hackers to justice and reclaim the stolen assets.
The CoinEx hack stands as a stark reminder of the ever-present threats in the cryptocurrency industry. The incident serves as a wake-up call for exchanges, urging them to continually strengthen their security measures and adopt robust protocols. CoinEx’s quick response and proactive measures provide reassurance to its users and the wider crypto community that they are committed to safeguarding their assets and maintaining trust in the face of adversity.
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