CoinEx To Offer Bounty If Stolen Funds Are Returned

CoinEx offers bounty to hackers for stolen assets return after $70M breach. North Korean-sponsored Lazarus Group identified as culprits.

Sep 18, 2023 - 13:01
Oct 19, 2023 - 14:24
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CoinEx To Offer Bounty If Stolen Funds Are Returned
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CoinEx, a major cryptocurrency exchange, recently took an unconventional approach after suffering a significant breach. Instead of ramping up security measures, the company reached out to the hackers, offering a bounty in exchange for the return of stolen assets.

On September 12, CoinEx experienced a significant security breach. The hackers managed to drain approximately $55 million from the platform's hot wallets. This incident led CoinEx to temporarily suspend all deposits and withdrawals, initiating a thorough investigation into the breach. Notably, the North Korean-sponsored Lazarus Group was identified as the culprits behind the attack.

In a bold move, CoinEx addressed an open letter to the hackers on September 15. The letter emphasized the impact of the hack on the platform's users, representing the trust of millions of customers worldwide. CoinEx expressed its hope that the hackers would recognize the gravity of their actions and the subsequent effects on individual users. 

“We encourage you to communicate and negotiate with us actively on the blockchain or through our official email address (support@coinex.com). If you are willing to return the stolen assets, we will offer you a generous bug bounty as a reward.”

The letter was an invitation for dialogue, negotiations, and potential collaboration. Moreover, the company extended an invitation to the hackers to collaborate on improving the platform's security measures.

"Whether you’re dissatisfied with the current state of blockchain security or simply testing the security of the exchange system, we hope to build a sincere and open channel of communication…If possible, we sincerely invite you to discuss the future upgrade of CoinEx’s security system."

While the initial reports estimated the stolen assets to be around $55 million, further investigations revealed that the actual amount was closer to $70 million. Despite this significant loss, CoinEx emphasized that the stolen funds represented only a small fraction of its total assets. 

“Currently, we focus on upgrading the wallet architecture, calculating losses, and freezing related suspicious addresses by coordinating with industry partners and peer exchanges. Regarding compensation plans for the stolen assets, we are now formulating options. The compensation will be provided per-coin, with details to follow in our official announcements later.”

The likelihood of recovery might be lowered if Lazarus indeed orchestrated a $55 million crypto heist on CoinEx.

ZachXBT, an on-chain detective, pointed to North Korean hackers as the brains behind the CoinEx breach. This claim was further supported by blockchain security entity SlowMist, referencing data that linked transactions to wallets previously associated with breaches on platforms such as Stake and Alphapo.

Given the FBI's connection of Lazarus to these incidents, a growing consensus suggests that the North Korean cyber culprits, allegedly stealing $270 million from various crypto platforms, might also be responsible for the CoinEx intrusion.

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.