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KuCoin CEO claims it has detected suspicious hackers and is getting back on track

Photo of: Sangeetha Golchha
by Sangeetha Golchha

Crypto exchange KuCoin announced that it has finally identified the entities responsible for last month’s crypto hack. We had previously reported to you that the KuCoin hack led to the loss of $279 million in crypto and a good portion of the funds were sold off through exchanges. Yet the official statement points out that most of the funds were recovered thanks to the timely and proactive measures by blockchain projects and exchanges to freeze the movement of the funds. 

The CEO, Johny Lyu wrote exclusively in a statement that the necessary identifications have taken place and the proofs are present to substantiate it further. 

Source: Twitter

The KuCoin hack is potentially the first high-profile case of a decentralized exchange used to launder funds. Following the hack on September 25th, the exchange released a statement that KuCoin has been quick to act and trying its best to mitigate the impact of the attack. Ever since it has been engaged in discussions with several other crypto firms and security firms to ensure the repercussions are at best reduced. 

Earlier this year in March, KuCoin was marred in several controversies. For starters, it was facing the possibility of a class-action lawsuit claiming KuCoin provided its customers with misleading statements. In another lawsuit, it was alleged that the exchange was dealing with unlicensed securities which are not functioning within legal boundaries. 

Around the same period, the KuCoin team announced that it will be undergoing some massive corporate restructuring that witnessed the firm change its trademark also from one Seychelles-registered entity to another. The firm also appointed a new director who had no major role at the exchange. Even to date, its exact location is not known. 

People have apparently started questioning its legitimacy of operations. Many even stated that the platform might just be another big exit scam. To counter this the company official said:

KuCoin is a genuine platform backed by famous VCs. As early as 2018, we got an investment of $20 million from IDG and Matrix Partners. IDG is very ‘picky’ when investing in crypto exchanges.”

John Jefferies, the chief financial analyst at CipherTrace — a crypto-focused security firm said that most of the cryptocurrencies stolen from KuCoin where ERC-20 tokens which can be easily laundered through the DeFi protocols.

“This was the first high profile case of a DEX, Uniswap, being used as a money mixer. Unlike centralized exchanges, a DEX can’t freeze funds — only specific projects can. Another significant impact here is that the theft of the tokens directly impacted the firms of these stolen tokens, such as Crypterium and Tether because the hack included CRPT tokens and Tether on both EOS and Ethereum blockchains.”

The KuCoin exchange as of now has figured out the suspicious address and has managed to damage control of the situation. Lyu said that with the great support from the entire industry, another $64 million in assets were out of control of the suspicious addresses bringing the total value of it to $204 million. He also said that the exchange is gaining strength gradually.