An undisclosed cryptocurrency exchange in Istanbul, Turkey was hacked this week of a reported USD 2.47 million.
The company was attacked by a group which has now been detained by Turkish authorities after a nationwide investigation across 8 provinces, and so far has only recovered USD 256,000 of the stolen funds.
The exchange alerted the authorities at the time, reporting that a large amount of Bitcoin, Ethereum, and XRP had been stolen. The Istanbul Cybercrime Branch Officer later clarified that two companies had been targeted in a theft which amounted to 13 million Turkish lire (USD 2.47 million). The stolen funds had been transferred from both companies’ wallets into wallets in the hackers’ possession.
It transpires that hackers had been using the ‘Player Unknown’s Battlegrounds’ (PUBG) online video game as a means of communication. It is clear that the compromised security of both companies could have been avoided if the necessary security measures had been incorporated into their trading systems, an issue which often befalls smaller exchanges, despite warnings from regulators.
Most larger exchanges have far better security, which makes the success rate of such hacks uncommon, limited to smaller exchanges without rigid security procedures. However, the recent misfortunes of QuadrigaCX prove that no measures are completely infallible after CEO Gerald Cotten died having moved funds from the company hot wallet into cold storage for security purposes, protecting his clients’ funds from potential hackers.
The now insolvent crypto exchange QuadrigaCX was left unable to access USD 190 million of funds stored in the cold storage due to the CEO having sole responsibility for the private key.
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