Johnny Lyu, the Global CEO of KuCoin made an official statement on Sept. 26 confirming a major hacking. Lyu hosted a livestream at 12:30 (UTC+8) and made more updates concerning the incident.
He said that according to their latest internal security audit report, part of Bitcoin, ERC-20 and other tokens in KuCoin’s hot wallets were transferred from the exchange after private keys had been leaked. However, assets in cold storage wallets are safe and secure and hot wallets have been re-deployed.
Reports claim that the breach in security may have affected an estimated $150 million in user funds.
The price of Bitcoin and other major altcoins such as Ether and Decentralized Finance (DeFi) were not affected by this hack, their prices remained unfazed through the incident. Before, there would have been market-wide sell-offs as investors were afraid of hackers selling off the proceeds of such a hack, which was not the case this time.
Tether and Top Exchanges Freeze Funds
Tether (USDT) moved quickly to stop transfer of assets linked to this hack. Major exchanges such as Bitfinex also moved to freeze USDT associated with the breach.
This quick response from Tether and top exchanges could play a huge role in making sure most of the funds acquired during the hack are not moved.
The chief technical officer at Bitfinex and Tether, Paolo Ardoino, stated that these two entities froze a total $33 million. Bitfinex froze $13m Tether USDT on EOS and Tether froze 20m Tether USDT on their Ethereum address.
If the claims that there was a loss of $150 million, the freezing of $33 million represents 22% of the lost funds.
Most of the hacked funds are reportedly stored in ERC20 tokens while a few are in Bitcoin. This means that the hackers can most likely utilize DeFi protocols in a move to eliminate tainted tokens.
However, Primitive Crypto cofounder Dovey Wan said the hackers struggled to handle the tainted funds. In a tweet, she said that the hacker was a DeFi nood who tried to sell on Binance but didn’t swap the tainted USDT on Curve.
Price of BTC Remained Stable
On Sept. 26, BTC whale clusters at $10700 grew after the coin’s rally above $107000. According to data on this price growth, whales have been accumulating above $10000, showing an overall strong market sentiment.
After such a high profile security breach, the unfazed price of bitcoin shows strength of the ongoing uptrend. If this trend was not strong, selling trends would have been high, affecting the price downwards.
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