Hong Kong-based cryptocurrency exchange, CoinEx, recently disclosed that compromised private keys led to a significant theft of tokens totaling more than $70 million.
Despite this substantial loss, the exchange has reassured its users that the stolen amount represents only a small portion of its overall assets under management.
CoinEx has pledged to fully compensate affected users for their lost funds as it actively works to recover and enhance platform functionality.
The exchange is diligently investigating the security breach, with several blockchain security firms attributing the incident to North Korean Lazarus Group hackers.
CoinEx has taken the unusual step of initiating direct communication with the hackers in an effort to reach a mutually agreeable resolution.
Preliminary findings from the investigation point to a compromised private key for the exchange’s hot wallets, which are used to store assets for deposits and withdrawals.
To mitigate further losses, CoinEx suspended its withdrawal service, patched system vulnerabilities, and transferred remaining assets from the compromised hot wallets.
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The exchange anticipates gradually resuming withdrawals within seven business days.
In response to the breach, CoinEx has prioritized the development and deployment of an entirely new and robust wallet system capable of handling activities across its extensive portfolio of 211 chains and 737 assets.
The incident began when CoinEx initially noticed “anomalous withdrawals” from one of its hot wallets on September 12, starting with a transfer of 4,947 ETH.
Subsequently, the hackers executed significant withdrawals of other tokens to the same address. Initially estimated at $27 million, the value of the stolen funds has since doubled in the week following the breach.
North Korean hackers have been a persistent threat to the cryptocurrency space in recent years, orchestrating some of the largest thefts in the industry’s history.
In 2022, they masterminded the Axie Infinity Ronin Bridge hack, resulting in the theft of over $650 million.
Chainalysis, a blockchain analytics firm, estimates that North Korean hackers have already stolen approximately $340 million in cryptocurrency in 2023.
This figure is expected to rise with the addition of the CoinEx hack and a $41 million hack of the cryptocurrency gambling platform Stake on September 4.
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