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KuCoin Exchange reports hack worth over $150 million stolen from its hot wallets

Photo of: Sangeetha Golchha
by Sangeetha Golchha

The DeFi sector is growing, but so are the hacks and malicious attacks against different entities present in the system. The latest to be added to the list of the effect is the KuCoin, the much-noted crypto exchange that has become the target for hackers. The outcome of the attack – More than $150 million in BTC, ETH, and other cryptocurrencies that have been stolen from the hot wallets. 

This is not the first time that malicious attackers have taken advantage of the weaknesses of the inherent system. The incident shows how the system of hot wallet storage still has its weaknesses and vulnerabilities that need to be addressed on an immediate basis. History says that most of the attacks on the high profile exchange in the cryptocurrency exchange have always become possible because of a breach of the hot wallet’s storage system. 

KuCoin confirmed the news of the major breach through an online communication dispatch that was issued on September 26th. In the announcement, KuCoin said that it became suspicious when there were large-scale withdrawals from its wallets. 

Source: Etherscan

This the Etherscan data which shows the wallet behavior connected with the hack presently holding 11,480 ETH worth over $4 million. Another crypto analytics platform CryptoQuant reported an increase in Bitcoin outflow from the exchange itself which again points back towards the attack. 

Considering these recent figures, the hackers have reportedly stolen $150 million in different cryptocurrencies. KuCoin is yet to inform about the extent to which the hack has taken place. To appease the fears of the users, KuCoin has assured its users that through its insurance fund, the affected users will get full compensation and coverage of their stolen assets and funds.

KuCoin’s CEO has revealed that when the hack came into light compromising its hot wallet keys, it had moved the untouched funds to another address so that further damage could be averted. The CEO has further assured that its cold wallet remains uncompromised and safe, with the hack not able to compromise user data in any form.

BitBns, another crypto exchange expressed solidarity with KuCoin and has reported on Twitter that it has already blocked the addresses and it stands in support of the exchange. KuCoin has indeed received a lot of support especially from industry contemporaries and it has appreciated all the wishes coming it’s way. 

Source: Twitter

There were some users who also said that this hack will help KuCoin strengthen its ecosystem further. There were others who believed that the KuCoin hack offers a glaring example of the danger of keeping funds on crypto exchanges. In September this year, the Slovakian exchange platform Eterbase also faced a major setback when it suffered a $5.4 million hack. 

When the security measures were revamped BelnCrypto reported that the total amount lost to hackers in 2019 decreased to a large extent. But, even after revamping them, the attacker consortium comes back with sophisticated vectors to milk out as much as they want.