By
Temitope Olatunji
April 19th, 2024
KuCoin has restored full access to 176 tokens out of a total of 230 tradable ones and hopes to resume service for others before November 22.
The hacked exchange KuCoin has managed to recover a substantial amount of funds after the hack that occurred in September. Following that development, the exchange’s management has confirmed that it will resume its services back to normal later this month. On November 11, a senior executive of KuCoin announced that the exchange had now recovered 84% of stolen digital assets after the hack.
KuCoin co-founder and CEO Johnny Lyu tweeted yesterday about the recovery of the funds.
(1/3) Latest updates about #KuCoin Security Incident: So far, 84% of the affected assets have been recovered via approaches like on-chain tracking, contract upgrade and judicial recovery. As asked by the law enforcements, we will publish all the details once the case is closed.
— Johnny_KuCoin (@lyu_johnny) November 11, 2020
While talking that the exchange employed contract upgrade, judicial recovery, and on-chain tracking methods to recover the funds, he emphasized that more details on reimbursement will be provided once the process is complete. The Asian cryptocurrency exchange is now in a good position after funds amounting to $236 million (about 84%) were recovered from the $281 million worth of funds stolen.
KuCoin Lost $281 Million in Hack
On September 26, hackers decided to take advantage of the loopholes that existed in the exchange’s system to steal money. Large withdrawals of Bitcoin (BTC) and Ethereum (ETH) tokens to an unknown wallet was detected in the incident.
According to Lyu, the cyber- thieves utilized a leaked private key to access the exchange’s hot wallets and cause damage. After detecting the incident, KuCoin froze all customer deposits and withdrawals and went ahead to transfer the remaining funds from the old hot wallets to new ones.
Only the hot wallets were affected since the cold cryptocurrency wallets remained intact as they are not connected to the internet. Funds were also stolen from wallet addresses holding other tokens such as Bitcoin SV (BSV), XRP, Litecoin (LTC), Tether (USDT), Tron (TRX), and Stellar Lumens (XLM).
After the hacking incident took place, Lyu wasn’t able to specify the exact amount of digital assets that were lost. He initially estimated the losses to amount to $150 million, but shortly Chainalysis, a crypto analytics company, revised the estimates to $275 million.
Suspects Identified, Full-Service Resumes
In early October, Kucoin said that it had ‘substantial proof at hand’ that identified the hackers, which it gave to law enforcement agencies to carry out their investigations. Besides incorporating law enforcement, the company also received great support from its partners to recover assets worth $64 million from the control of the suspicious addresses at that time. Now, it is working with Binance, Huobi, OKEx, ByBit and BitMax, to make it challenging for hackers to try steal funds again.
Crypto-focused security firm CipherTrace’s chief financial analyst had earlier pointed out that ERC-20 tokens were the most cryptocurrencies stolen from KuCoin since it was easy to launder them via DeFi protocols. So far, KuCoin has restored full access to 176 tokens out of a total of 230 tradable ones and hopes to resume service for others before November 22.
(2/3) #KuCoin has resumed the full service of 176 tokens and all others are scheduled to be re-opened before November 22. Again, I would like to thank all the individuals and institutions who helped us in this incident, together, we will make a stronger crypto community. 🙏
— Johnny_KuCoin (@lyu_johnny) November 11, 2020
Even as the crypto industry has grown far and wide, cybercriminals have continued to compromise many digital currency exchanges. Some of the recent incidents include Italian crypto exchange Altsbit losing digital assets worth $70,000 in February 2020, South Korean exchange Upbit reportedly losing Ethereum valued almost $51 million in November 2019, Binance bad players running off with Bitcoin worth $40 million in May 2019, and so on.