KuCoin got no coin, thanks to a security breach at the ‘safe’ crypto exchange.
The Singapore-based cryptocurrency exchange KuCoin released a statement regarding detecting large withdrawals on September 26, 2020, at 03:05:37 (UTC+8).
The exchange has reportedly lost $150 million worth of funds, although KuCoin hasnâ€™t declared it yet but released â€œsuspicious addresses,â€ which are constantly updated. As per the company’s internal security audit report, some BTC, Tether, ERC20 tokens, and other cryptos from KuCoinâ€™s hot wallets were transferred out of the exchange.
Tether has already frozen all the stolen USDT, but the community isnâ€™t supportive of the move. This isnâ€™t even the first time they did so; one address in 2017, eight in 2018, seven in 2019, and 24 in 2020 so far has been frozen by the company.
â€œIf you steal our Tether, we’ll steal it right back,â€Â commentedÂ one trader on this move.
KuCoin assured that â€œthe assets in our cold wallets are safe and unharmed, and hot wallets have been re-deployed.â€
In a live stream, KuCoin CEO Johnny Lyu said one or more hackers â€œstoleâ€ the private keys to hot wallets but those cold wallets, that arenâ€™t connected to the Internet as such considered more secure, were unaffected.
He also said the exchange is in contact with the police and that â€œall the loss will be covered by KuCoin risk provisions.â€
The exchange has transferred the remaining crypto assets to the new hot wallets.
The Asian exchange that trades over 200 cryptocurrencies has a daily trading volume of about $100 million, as per CoinGecko. Following the security breach, its exchange token KCS fell by over 17% but has since recovered to above $0.90.
The trouble at the exchange first started when users complained about withdrawal issues. Initially, it was maintained that the platform was experiencing a system issue, and later, KuCoinâ€™s admin team claimed that â€œtransactions are simply pending,â€ and funds are SAFU.
While Liu said the amount lost is â€œsmall,â€ that might not be the case, many areÂ pointing outÂ that there could be over 1k BTC and tokens like ETH, LTC, Omni USDT, XRP, YFI, OMG, Maker, Ocean Token, Chroma, Gladius, Hawala, and others lost.
Currently, the investigation is going on, and a security review will also be conducted. Still, the exchange has said that any losses suffered by a user would be â€œcovered completelyâ€ by KuCoin and its insurance fund.
As â€œThe Peopleâ€™s Exchange,â€ we will take full responsibility and maintain transparency,â€ said the exchange in an official statement.
For now, the exchange has suspended the deposits and withdrawals service, which will be restored gradually once it ensures a safe state.