Monday, October 2, 2023

The $70 million CoinEx hack was due to compromised private keys

The cryptocurrency exchange Hong Kong-based CoinEx has revealed that hackers stole more than $70 million worth of tokens due to compromised private keys. and that the team is trying to open lines of communication to recover the funds.

CoinEx representatives revealed the details of their ongoing investigation to Cointelegraph The team is working to build and deploy a new wallet architecture to restore affected users and platform functionality.

Although the value of cryptocurrencies stolen from the platform is estimated at $70 million, the exchange claims that this amount represents only a small percentage of its total assets under management.. CoinEx stated that affected users will be fully compensated for lost funds.

CoinEx said it was still investigating the identities of those responsible for the security breach. which a handful of blockchain security companies attribute to the North Korean hacker group Lazarus Group.

“In addition, we have opened communication channels with the hackers in the hope of achieving a proactive dialogue that leads to a mutually acceptable solution.”

The exchange explained that a preliminary investigation traced the cause to a compromised private key of its online wallets. These were used to store foreign currency balances for deposits and withdrawals.

CoinEx has suspended its withdrawal service to prevent further losses, fixed system vulnerabilities and transferred remaining assets from affected online wallets. The exchange told Cointelegraph that it expects to gradually resume withdrawals within seven business days.

“Our team is currently focused on building and deploying an entirely new and robust wallet system to process activity across the 211 chains and 737 assets.”

As Cointelegraph originally reported, CoinEx first experienced “anomalous withdrawals” from one of its online wallets on September 12, starting with a transfer of 4,947 Ether (ETH). The hackers then began withdrawing large amounts of other tokens to the same address.

The value of the stolen funds was initially estimated at $27 million, but has doubled the week after the incident.

Many North Korean hackers have targeted the cryptocurrency sector in recent years and have been responsible for the largest thefts in the sector to date. More than $650 million was stolen in the 2022 Axie Infinity Ronin Bridge attack alone.

The blockchain analysis company Chainalysis estimates that North Korean hackers will have stolen around $340 million in cryptocurrencies in 2023. That number is now expected to rise as it is attributed to the CoinEx hack and a $41 million hack of cryptocurrency betting platform Stake on September 4th.

Nation World News Desk
Nation World News Desk
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