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Through continuous cyber-forensic investigations and in-depth ranking methodology, CER has gained crypto traders’ trust as the only unbiased platform for crypto exchange reliability checks.ĬER.live is integrated into one of the largest crypto-related analytical websites, CoinGecko, and is a member of all major crypto transparency alliances, including the Data Transparency and Accountability Alliance, run by CoinMarketCap. Perform audits of the cryptocurrency storage system that is included in SOC2 and/or ISO27000 auditing procedures: CER.live Downgrades KuCoin.īecause of the security incident, CER.live has now downgraded KuCoin from 6th place to 24th.ĬER provides a fundamental analysis of the cryptocurrency exchange market. Perform regular penetration tests, phishing simulations, and red team exercises.Each wallet must have its own private key. Store crypto in several hot wallets for each cryptocurrency platform.The other 95% must be stored in a cold wallet. Do not store more than 5% of all deposits in hot wallets.One of the most popular ways is to use Shamir’s Secret Sharing scheme. KuCoin’s hot wallet key pairs have not been changed for three years their first transactions were made on September 17, 2017. Periodically reinitialize hot wallets.The following list includes some of the exchanges that rely on hot wallets: Since the KuCoin hack was due to leaked information about hot wallets, we consider exchanges that store large amounts of funds in hot wallets to be at risk of a similar attack. Other exchanges do have insurance funds to be used in such events, like the Bittrex Digital Asset Insurance or Coinbase. It is possible that these funds are kept in bank accounts of the exchange or in “secret” wallets, but we do not have such information. In addition, the exchange did not have a secure asset fund from which to recover losses. Will KuCoin Cover the Losses?ĭespite the exchange claiming to reimburse all losses to users, we can see that there are not enough funds on the identified KuCoin wallets to pay off the losses caused by the hack. Social engineering attack - Hackers could obtain access to private keys as a result of a phishing attack by using exploits, viruses, and backdoors on employees who had access to private keys.Īccording to KuCoin CEO and co-founder Johnny Lyu on Twitter, the Kucoin team has found suspects, but no more information was given beyond that law enforcement is involved.However, we consider such a version unlikely. Attack on web infrastructure - An attacker could gain access to the exchange’s hot wallet services.Malicious actions of employees - Exchange employees could have illegally shared the hot wallets’ private keys.Everyone can exchange cryptocurrency without fear of their transactions being blocked. Uniswap is completely decentralized and is a reliable service for exchanging cryptocurrencies. The fact that a hacker uses decentralized exchanges negatively affects their reputation but at the same time confirms their reliability. However, hackers took advantage of the fact that there is no single point of authority that could block them from using the platform and were able to launder the stolen funds.
BLOCKSWORLD COIN HACK FULL
A key advantage of Uniswap, a decentralized exchange, is that it enables users to retain full custody of their digital assets when exchanging them. The hacker made withdrawals from the KuCoin hot wallets to the following addresses:Īs we found out from the transactions, the hacker sold the stolen cryptocurrency from the above addresses on decentralized exchanges like Uniswap and anonymized the stolen cryptocurrencies through mixing services. Bitcoin transactions, on the other hand, cannot be blocked, However, Tether’s ability to block transactions has been seen by others as antithetical to the core values of cryptocurrencies, since blocking transactions exposes the centralization in the Tether protocol. Thanks to Tether’s blocking, KuCoin has already been able to return funds equivalent to $64 million. The Tether team was able to block all of the stolen USDT, which some consider is a good way to deal with cases of hacked or stolen coins. 9,588,383 XLM, Omni and EOS-based Tether ( USDT) worth $14 million.The following cryptocurrencies were stolen: On their official website, the KuCoin team explained that the hack was due to a leak of the KuCoin hot wallet private keys. The estimated stolen cryptocurrency amount is more than $275 million in various cryptocurrencies. On September 25, 2020, cryptocurrency exchange KuCoin was hacked.