- Hong Kong-based crypto exchange CoinEx has suffered an attack on its hot wallets losing over $55 Million in Cryptocurrency.
- The attack is said to be as a result of private key compromise, an increasing vulnerability in the industry.
- The attack has been traced to North Korean hackers, the Lazarus Group.
According to on-chain data, the Hong Kong-based crypto exchange CoinEx suffered an exploit on September 12 that led to the emptying of four hot wallets holding more than 28 million in crypto assets. The exchange consequently suspended withdrawals as it embarked on a thorough review and investigation.
The incidence was brought the public by several cybersecurity firms including PeckShield and Cyvers Alert, who raised the alarm upon suspecting outflow of funds from the exchange’s wallets. In response, CoinEx posted on X saying that it had “detected anomalous withdrawals from several hot wallet addresses used to store CoinEx’s exchange assets.”
The fact that all the stolen funds were transferred to a wallet with not transaction history immediately raised concerns among security firms. This led them to immediately believe that CoinEX might have been under attack.
Data from Etherscan, a block explorer and analytics platform for Ethereum, revealed a series of significant transfers involving different cryptocurrencies were started by the four CoinEx hot wallets to a single address.
The first transaction in the sequence involved a transfer of about 4,947 Ether, approximately $7.9 million at the time.
Other transactions involved using Uniswap to convert a number of other tokens from the exchange wallet into Ethereum. Then, a notable movement of tokens from the hot wallet to the same address involving 408,741 DAI, 2.7 million Graph (GRT) tokens, 29,158 Uniswap (UNI) tokens, and numerous other tokens took place.
Data by Cyvers Alert revealed additional transactions including the transfer of over $8.5 million in cryptocurrency assets to a Tron address and $291,000 in assets to a Polygon address. Over three distinct blockchains, this totaled $27.4 million.
However, in its post on X, CoinEx said that the actual amount of the loss was still being determined, adding that it was “just a very small portion of CoinEx’s total asset[s].”
Some of the results of CoinEx’s investigations determined several wallets that had been drained of assets in the form of various crypto tokens including Bitcoin, Arbitrum, Solana, XRP, and several others. At the time of writing, the total loss has increased to around $55 million worth of crypto.
The exchange continues to assure its customers that their funds were safe and that they would be made whole in the event of any losses.
“We assure all users: your assets are secure and untouched. Affected parties will receive 100% compensation for any loss due to this breach,” CoinEx said adding “You have our solemn promise that a detailed timeline and comprehensive report about this incident will be shared with the community as swiftly as possible.”
Since promising to share updates, CoinEx has provided several lists of suspect wallet addresses connected to the hack. Aside from ETH, MATIC, and TRX, other affected cryptocurrencies include Bitcoin, Arbitrum, Solana, XRP, and several others.
Increasing Private Key Vulnerabilities
It has been revealed that the exploit is reportedly a result of a private key compromise, a vulnerability that has so far led to the loss of over $377million across the industry
Blockchain security companies have established that the exploit may have been carried out and executed by Lazarus Group, a North Korean team of hackers. This group, which is known for targeting crypto businesses, is also believed to have been responsible for the Stake and Alphapo exploits.
The nature of exploits in the blockchain and cryptocurrency sector are becoming increasingly common with new ways being devised even as security vulnerabilities increase across platforms.
The crypto industry has reportedly lost close to $1 billion to hacks, exploits and scams as of the end of August. The value is expected to continue increasing, and could possibly surpassing last year’s loss of $3.2 billion.