Crypto Exchange KuCoin Reports Security threat as $150M moved from its Hot Wallet

KuCoin crypto exchange was hacked on September 26 leading to the transfer of BTC, ERC-20 and other tokens from the exchange's hot wallet.

By · Sep 27, 2020 . 6min read

Crypto Exchange KuCoin hacked latest news
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KuCoin, one of the largest crypto exchanges, suffered a cyberattack by hackers on September 26. Exact information about the KuCoin crypto exchange hack remains unrevealed. However, KuCoin states that they lost approximately $150 million in funds from its hot wallet. The funds moved from KuCoin to an unknown address. Nevertheless, the unknown address in question has since been doing test transactions, with the funds still with the address. 

According to the exchange, hackers mostly targeted BTC, ETH, and ERC-20 tokens in the hot wallet. Its cold wallets remain unaffected. However, the tokens which were transferred contained a few parts of the total asset holdings of KuCoin. KuCoin says that the network’s risk management system raised the flag on abnormal activity in the hot wallets soon after the transactions. It shut down the wallet servers immediately, transferring all the assets to the cold wallets.

KuCoin has also declared that right after the hack, they did a comprehensive security audit. The primary purpose of this audit is to ensure the safety of other funds. Along with this, it also suspended the withdrawals and deposits of the users. Surprisingly, it has not yet listed this incident as a hack. According to the exchange, they identify this hack as a security incident even though it is evident that this is a hack.

KuCoin Will Cover Fund Losses of the Users

KuCoin assures its users that it will satisfy all their fund losses completely. The insurance fund of the exchange will look after this situation. Johnny Lyu, the CEO of KuCoin, has said that he will be doing a Livestream to talk about this incident.

The response to the security incident, as anticipated, wasn’t pleasant, with many users claiming lack of transparency and formal communication as the major reason behind the security incident. However, it has requested for more time to do a detailed review of the situation. The confusion and the alleged failure in communication on the management’s front have also led to KuCoin shares ($KCS) dropping significantly by 10-15%.

However, this is not the first time KuCoin is experiencing a glitch in security. Earlier, it announced that a website is using the KuCoin trademark to ask users to transfer digital assets to particular deposit addresses by operating fraudulent incentivizing activity on the webpages. Therefore, it has warned its users against this fraudulent website.

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