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CoinEx hack – compromised private keys led to $70M theft

CoinEx hack - compromised private keys led to $70M theft

Hong Kong-based cryptocurrency exchange CoinEx has announced that hackers were able to steal over $70 million worth of tokens due to compromised private keys. The exchange is working on establishing communication with the hackers in an effort to recover the funds. Meanwhile, CoinEx is developing a new wallet system to restore functionality and compensate affected users. Despite the significant amount stolen, CoinEx claims it represents only a small percentage of its total assets. The exchange aims to resume withdrawals within 7 working days while prioritizing asset security.

The identity of the hackers responsible for the security breach is still under investigation, but some blockchain security firms believe it to be the work of the North Korean “Lazarus Group”. CoinEx has reached out to the hackers in hopes of finding a resolution. A preliminary investigation suggests that compromised private keys for its hot wallets were the root cause of the breach, which were used for deposits and withdrawals.

CoinEx temporarily suspended its withdrawal service, fixed system vulnerabilities, and transferred remaining assets from the affected hot wallets. The exchange plans to gradually resume withdrawals within 7 working days. CoinEx is also focusing on building and implementing a new wallet system to handle its various chains and assets.

The incident began with anomalous withdrawals from one of CoinEx’s hot wallets on September 12, with the hackers subsequently withdrawing large amounts of other tokens. The estimated value of the stolen funds initially stood at $27 million but has since doubled. North Korean hackers have been known to target the cryptocurrency space, with numerous major thefts attributed to them.

According to blockchain analytics firm Chainalysis, North Korean hackers have stolen approximately $340 million worth of cryptocurrency in 2023. This figure is expected to increase due to the CoinEx hack and a $41 million hack of cryptocurrency gambling platform Stake on September 4.