CoinEx Faces Security Breach with Over $27 Million Potentially Lost
Date: 2023-09-13 Author: Dima Zakharov Categories: BLOCKCHAIN, CRYPTO PAYMENTS
Unusual Withdrawals Detected
The breach came to light when CoinEx detected unusual withdrawals from its hot wallets, where the platform stores its exchange funds. This discovery sent alarm bells ringing across the organization. Among the affected cryptocurrencies are Ethereum (ETH), TRON (TRX), and Polygon (MATIC). Furthermore, later statements from CoinEx's international accounts indicate that even XRP was not spared from the incident.
Extent of the Losses Uncertain
At present, CoinEx has not determined the exact extent of the losses incurred. However, the platform has assured its users that their assets remain secure and untouched. In a tweet, CoinEx stated that affected parties would receive full compensation for any losses resulting from this breach. As an additional security measure, CoinEx has temporarily suspended deposit and withdrawal services, which will resume only after a thorough review.
Third-Party Estimate: $27 Million Loss
Cyvers Alerts, an independent security firm, was the first to detect the breach. Deddy Lavid, CEO of Cyvers Alerts, revealed that his firm made extensive efforts to contact CoinEx executives but received no response. Cyvers Alerts estimates that the attack has led to a loss of approximately $27 million in cryptocurrency. This amount comprises $18.12 million worth of ETH, $8.5 million worth of TRX, and $291,000 worth of MATIC, along with various other ERC-20 tokens.
Possible Causes of the Breach
Cyvers Alerts has proposed several possible causes for the security breach. It's conceivable that CoinEx inadvertently leaked private keys associated with cryptocurrency addresses or allowed access control violations. Alternatively, deliberate misconduct, such as a "rug pull" or an inside job, might be behind the incident.
Significance of the Incident
This breach holds significance due to CoinEx's standing as a moderately sized exchange in the cryptocurrency market. Just before the breach, it had handled approximately $29.7 million in trading volume over a 24-hour period. CoinEx had previously made headlines when it decided to exit the U.S. market in February, citing evolving U.S. regulations and regulatory scrutiny in New York State.
This security breach serves as a stark reminder of the ongoing vulnerabilities within the cryptocurrency space and the critical need for robust security measures to safeguard digital assets. The cryptocurrency community awaits further developments as CoinEx investigates the breach and works towards rectifying the situation.
