The M2 exchange attacker swapped the stolen altcoins to Ethereum and Bitcoin, which could be in preparation for laundering on crypto mixers.
M2, a global cryptocurrency exchange founded in 2022 in the United Arab Emirates, announced that three of its hot wallets were compromised leading to a total loss of $13.7 million belonging to customers. According to a popular on-chain security analyst alias ZachXBT, the M2 attacker stole 4,010 Ether ETH $1 972 24h volatility: 0.2% Market cap: $237.98 B Vol. 24h: $10.88 B , worth over $10 million, 41 Bitcoins BTC $67 978 24h volatility: 0.0% Market cap: $1.36 T Vol. 24h: $19.59 B , worth around $3 million from the exchange’s hot wallets.
The M2 exchange attacker also stole some Solana SOL $84.99 24h volatility: 0.4% Market cap: $48.31 B Vol. 24h: $2.14 B tokens, which have already been swapped to Wrapped SOL. The young cryptocurrency exchange, currently available in over 150 nations, acted swiftly to ensure a seamless rebooting of its trading services.
“We would like to report that the situation has been fully resolved and customer funds have been restored. M2 has taken full responsibility for any potential losses, demonstrating our unwavering commitment to safeguarding our customers’ interests. All services are now fully operational with additional controls in place,” the M2 team reported.
The M2 team announced that it is working with the relevant legal and regulatory authorities to ensure the matter is settled appropriately. Moreover, funds stolen from cryptocurrency exchanges are often the result of internal negligence, leading to the leaking of vital information.
Closer Look at the M2 Exchange and Recent Hack
With the attacker having swapped the assets from smaller altcoins such as Shiba Inu (SHIB), the chances of the stolen funds ending up being laundered through Tornado Cash or any other crypto mixer have significantly increased.
💼 Fund Flow:
• EOA Receiving Funds from Hot Wallet: 0xb5f798
• After initial transfers, assets were moved to another EOA – 0x968b69 – for further distribution.
🔗 https://t.co/hEgd6r09q1https://t.co/KoXyZXJ4in pic.twitter.com/nsOzGNxX8h— Hacken🇺🇦 (@hackenclub) November 1, 2024
Moreover, similar incidents on other exchanges, such as the Indian exchange WazirX, resulted in the funds being deposited into Tornado Cash. In this case, the M2 customers were lucky enough to be reimbursed the funds by the company.
The M2 exchange has in the past received notable support from major investors led by Mr. Wonderful, Kevin O’Leary.
“The days of crypto cowboys are over. Abu Dhabi’s M2 exchange is exactly what this industry has been searching for. An exchange that is regulated, backed by billions of dollars, and tied to huge financial institutions,” O’Leary previously noted.
However, the endorsement by O’Leary is questionable as he has in the past closely worked with the defunct FTX crypto exchange. The M2 exchange is believed to have several connections to the government of UAE.
For instance, the M2 exchange has received backing from the chairman of the Phoenix Group Board, H.E Tareq Abdulraheem Al Hosani, who is the head of procurement for the armed forces of the UAE and the police for Abu Dhabi.
The M2 cryptocurrency exchange has a product dubbed M2 Earn, which offers its customers 11.5% APY on USDT and 10.5% APY on Bitcoin, which some experts believe are high risks.
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