CoinEx Loses $70 Million in Devastating Hack Due to Compromised Private Keys

Hong Kong-based cryptocurrency exchange CoinEx has disclosed that hackers were able to steal more than $70 million in tokens due to compromised private keys. The exchange is now focused on recovering the funds and restoring the functionality of the platform by developing a new wallet architecture. CoinEx assures its users that they will be fully compensated for any losses incurred.

In a tweet, CoinEx announced their strategy to gradually resume withdrawals within seven working days while ensuring the security of assets. The exchange is actively investigating the identity of the hackers behind the breach, with some blockchain security firms attributing the attack to the North Korean group known as the “Lazarus Group.” CoinEx has also reached out to the hackers in an attempt to engage them in finding a mutually agreeable resolution.

The preliminary investigation conducted by CoinEx revealed that a compromised private key for its hot wallets was the root cause of the security breach. These hot wallets were used for storing assets involved in deposits and withdrawals. To prevent further losses, CoinEx suspended its withdrawal service, patched system vulnerabilities, and transferred the remaining assets from the compromised wallets.

CoinEx aims to rebuild and deploy a new and robust wallet system capable of handling activities across the various chains and assets. The exchange plans to progressively resume withdrawals within the next seven working days.

The incident began on September 12 when CoinEx detected anomalous withdrawals from one of its hot wallets. Initially, approximately $27 million worth of funds were believed to be stolen, but this estimate has since doubled. It is not surprising that North Korean hackers are suspected in this case, as they have been responsible for some of the largest thefts in the cryptocurrency industry. In 2022, they stole over $650 million in the Axie Infinity Ronin Bridge hack.

According to Chainalysis, a blockchain analytics firm, North Korean hackers have already stolen around $340 million worth of cryptocurrency in 2023. This number is expected to rise further due to the CoinEx hack, as well as a $41 million hack of the cryptocurrency gambling platform Stake on September 4.

It is crucial for cryptocurrency exchanges to remain vigilant and continuously enhance their security measures to protect users’ funds from such breaches.

– CoinEx Official Twitter Account: [@coinexcom](link)
– CoinEx Official Announcement Regarding the Incident: [Link to Official Announcement](link)
– Related Article: “New York bans CoinEx exchange, seizes $1.7M in crypto assets” by [Author], published on [Source](link)
– Cointelegraph Magazine: “Web3 Gamer: PUBG devs’ Web3 project, Animoca’s $20M raise, Shardbound review” – [Link to Magazine](link)

❗Follow us on Twitter to get all the latest crypto news as soon as they're out! 🚀

J-S Tremblay
About the author - J-S Tremblay

I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...

View J-S Tremblay website

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top