A Hack To Remember: 150 Million USD In Losses. Will KuCoin Handle It?

Every crypto investor’s nightmare scenario was unleashed recently in Singapore. KuCoin, a Singapore-based cryptocurrency exchange issued a statement that announced that an elaborate hacker attack that targeted so-called “hot wallets” resulted in 150 million USD worth of losses. The statement carried on to say that all users whose accounts were affected by the attack will have their funds covered entirely by the KuCoin itself and the associated insurance provider.

Is the Silent Bandit Found?

So what happened there, exactly? Well, the anonymous criminal somehow obtained access to the user’s hot wallets and began withdrawing crypto. Luckily, the withdrawing process was noticed quite quickly, and the funds were transferred to the new hot wallets, leaving the old ones behind. In another strong of luck, cold wallets remained intact.

Investigators claim they tracked the hacker behind the attack on one of the world’s largest cryptocurrency exchanges, all while the emergency security measures are being taken all around the world. Johnny Lyu, the CEO of KuCoin announced that they have found the suspects responsible, reporting that law enforcement are now involved and pursuing the case. Lyu also said that KuCoin is slowly re-opening withdrawal and deposit functions for certain tokens affected.

A Lesson To Remember

Bitfinex, VELO, VIDT, COV, and SNTR, which ended up being among those who suffered most during this cryptocurrency leak are all taking actions to re-issue the stolen funds and freeze those that were successfully transferred to the anonymous wallet. On top of that, Ampleforth (AMPL) quickly responded to the attack by sanctioning all transfers and transactions that could be carried out from the wallet of the anonymous attacker. But that’s merely a short-term measure, and it is yet unclear as to what the future of cryptocurrency will look like.

As the governments all over the world are slowly beginning to realize that it is no longer possible to ignore cryptocurrencies and make the first steps towards regulating it, the attack might actually be the catalyst that all cryptocurrency investors have been waiting for. With the amount of time, resources, and effort that goes into mining and trading cryptocurrency, the least that the crypto owner can expect is to have their funds secured. Although one might say that by getting into the cryptocurrency market one should already realize all the risks associated with it, it may also be true that such an adventurous approach is no longer necessary.

In countries such as Singapore, the governments recently shed some spotlight on the cryptocurrency industry by issuing some form of regulation and taxation. This seemingly insignificant development might actually mean that in the long run, all states will recognize that the crypto market is capable of producing a large chunk of the country’s overall revenues. However, in order for the cryptocurrency industry to do that, it is in a scarce need to be regulated and secured properly to prevent the dramatically major events from happening again. In 2018 alone, 4 similarly large hacker attacks have occurred, while 2019 saw a record of 12 major hacker attacks on the cryptocurrency exchange. One can, therefore, yet only dream that what we saw in Singapore on Sept 26 was the last one in a row.

Image courtesy of The Tradeable