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Cryptocurrency exchange Poloniex has fallen victim to a major hack, leading to an estimated loss of around $114 million, according to available on-chain data.
Justin Sun confirmed the exploit, adding that the exchange would reimburse impacted users, and also offered a white hat bounty to the hacker behind the exploit.
Details Of The Hack
The hack was initially flagged by blockchain security firms PeckShield and Cyvers. Poloniex announced just minutes after the PeckShield and Cyvers alert that the exchange wallet had been disabled for maintenance, stating that the thread would be updated for users once the hot wallet had been re-enabled. Following this, Justin Sun, Tron founder and investor in Poloniex, confirmed the hack, stating on X,
“We are currently investigating the Poloniex hack incident. Poloniex maintains a healthy financial position and will fully reimburse the affected funds. Additionally, we are exploring opportunities for collaboration with other exchanges to facilitate the recovery of these funds.”
Data from Arkham showed that multiple wallets across several blockchains had been targeted. A single Ethereum wallet, now tagged as the “Poloniex Hacker,” sent a total of $114 million worth of tokens from Poloniex, doing a total of 357 transactions. Additionally, a wallet on the Tron blockchain also sent $42 million to several wallets. How the hacker exploited the wallet is unknown, but there could be more information about the hack over the next few days.
Poloniex is one of the longest-running crypto exchanges and was founded in 2013. The exchange was acquired by Circle in 2018 before being spun off to several investors. Among these investors was Tron founder Justin Sun. Sun revealed he was part of the most recent acquisition in 2019.
Poloniex has facilitated $616 million of trading volume in the past 24 hours. However, its reserves cannot be viewed publicly, according to CoinMarketCap. This compares to $19.3 billion for market leader Binance and $3 billion for Coinbase. Coinbase is the only publicly traded crypto exchange.
Hackers Targeting Exchanges
Cryptocurrency exchanges have become a frequent target of hackers. A couple of months ago, the HTX exchange suffered a major hack, leading to $8 million worth of ETH being stolen. Additionally, South Korean crypto exchange Gdac lost $13 million after it was hacked in April, while Deribit lost $28 million after its hot wallet was hacked last November.
According to the available on-chain data, the Poloniex hacker bought $20 million worth of TRX, raising the token’s price by over 25%. Nansen, a blockchain analytics firm, reported that there were only 175 tokens left in the Poloniex wallet, worth around $10,000.
Sun Offers Hacker White Hat Bounty
Sun added that Poloniex was also ready to offer the hacker a 5% white hat bounty. The offer had a deadline of seven days to be accepted, following which Poloniex would begin engaging with law enforcement to attempt to recover funds. The Tron founder also added that Poloniex had successfully identified and frozen some assets associated with the hacker’s address. He also assured users that losses were within manageable limits and that Poloniex’s operating revenue would cover the losses.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.