CoinEx Exchange Suffered $55M Security Breach

Cybersecurity firms flagged unusual activities and abnormal withdrawals at CoinEx, with losses estimated at $55M.

Sep 15, 2023 - 14:39
Oct 19, 2023 - 14:09
CoinEx Exchange Suffered $55M Security Breach
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CoinEx, a well-known crypto exchange, recently found itself breached and drained by $55M in Crypto. On September 12, the exchange reported suspicious withdrawals, with estimates suggesting a loss of around $55 million.

CoinEx's ordeal began when several cybersecurity firms, including the blockchain analytics platform Cyvers, flagged unusual activities linked to the exchange. A recognized CoinEx hot wallet started transferring significant amounts of funds to an unfamiliar address. The initial alerts pointed to potential losses of $55 million across various cryptocurrencies, including Ethereum (ETH), Tron (TRON), and Polygon (MATIC). CoinEx, in its official communication, acknowledged these abnormal withdrawals but emphasized that the drained amount was only a small fraction of the exchange's total assets.

At around 1:21 pm UTC, a transaction from a known CoinEx hot wallet sent approximately 4,947 Ether, valued at $7.9 million at the time, to an Ethereum address with no prior transaction history. This was just the beginning. Following this, the same CoinEx wallet initiated multiple transfers, dispatching a variety of tokens to the same recipient address. The list of transferred assets included 408,741 Dai stablecoin, 2.7 million Graph (GRT) tokens, 29,158 Uniswap tokens, and several others.
Blockchain security firm PeckShield labeled the outflow as "suspicious." Similarly, CryptoQuant's head of research, Julio Moreno, found the behavior of the CoinEx wallet peculiar, noting that the Ether reserves had dwindled to nearly zero.

By 5:25 pm UTC, CoinEx took to Twitter to confirm the suspicious withdrawals. The exchange stated:

"Our Risk Control System detected anomalous withdrawals from several hot wallet addresses used to store CoinEx's exchange assets." 

In the wake of this security incident, CoinEx has set up a "special investigative team" to probe into the matter and ascertain the extent of the breach. In a reassuring move, CoinEx has promised its users total compensation for any losses originating from this breach. 

Established in 2017, CoinEx quickly rose to prominence, initially focusing on Bitcoin Cash (BCH) following its first hard fork. The exchange expanded its offerings in 2020, introducing futures trading, leveraged trading, options trading, and adding over 100 token projects to its platform. Interestingly, just a month before the incident, CoinEx proudly highlighted its robust security infrastructure, noting that it had never experienced a security breach.

Philip Bohmer Philip is a seasoned journalist that brings clarity to the complex world of cryptocurrencies through his articulate and insightful articles. His passion for blockchain technology fuels his writing, making him a trusted voice in the rapidly evolving digital currency landscape.