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CoinEx Bounces Back Strong: Restoring Trust and Security After $70M Lazarus Hack

Jack Evans
Sep 20, 2023 at 08:21 pm

Cryptocurrency enthusiasts and investors worldwide were left in disbelief as the news of CoinEx's $70 million loss to North Korean hackers, suspected to be the infamous Lazarus group, broke on the scene. This audacious cyber attack, which drained millions from CoinEx's hot wallets, raised concerns about the security of digital assets and the vulnerability of exchanges.

CoinEx swiftly responded to the crisis, making the safety of its users' assets its top priority. The exchange announced an ambitious plan to restore trust and security by reconstructing its deposit and withdrawal services for a range of tokens, including Bitcoin (BTC) and Ether (ETH), scheduled for September 21, 2023, at 8:00 UTC.

The cornerstone of this recovery effort was the deployment of a brand-new wallet system. CoinEx decided to generate fresh deposit addresses for BTC, ETH, USDT, USDC, TRX, LTC, BCH, DOGE, SHIB, and BNB. Users were urged to exercise caution and only deposit their cryptocurrencies into these new wallet addresses. The exchange issued a stern warning, emphasizing that old deposit addresses were rendered obsolete and assets sent to them would be irrevocably lost.

The security incident that led to the temporary suspension of CoinEx's crypto services was first discovered on September 12.

It prompted the exchange to take swift action to safeguard its users' holdings. Investigations revealed that the attackers had successfully infiltrated CoinEx's hot wallets. Unlike cold storage solutions, hot wallets are internet-connected to facilitate frequent on-chain transactions, which unfortunately makes them more susceptible to cyberattacks.

The initial estimates of the loss stood at $27.8 million but later ballooned to a staggering $54 million. Leading security experts, including blockchain firm Slow Mist and on-chain investigator ZachXBT, pointed to Lazarus as the likely culprits behind the CoinEx heist. Transaction data linked the malicious wallets used in this attack to previous Lazarus operations, including the infamous Stake's hack, which the FBI attributed to this notorious hacking group.

CoinEx left no stone unturned in its quest to recover the stolen funds, even offering a substantial bounty to encourage the hackers to cooperate. Throughout this tumultuous period, the exchange reassured its users that their assets remained "100% secure and 100% intact."

Lazarus, the shadowy North Korean hacking group, continued its spree of cyber attacks, targeting crypto employees and attempting to compromise decentralized protocols and digital asset platforms. Notable incidents in their repertoire included the staggering $100 million hack of Atomic Wallet and the audacious $41 million stolen from the crypto casino, Stake.

CoinEx's resilience in the face of adversity serves as a testament to the crypto industry's determination to overcome challenges and protect the interests of its users. As the exchange takes decisive steps to restore trust and security, the broader community watches with anticipation, reaffirming its belief in the transformative potential of cryptocurrencies and blockchain technology. While the specter of cyber threats looms large, the relentless pursuit of innovation and security remains the driving force behind the crypto revolution.

Read more: Protecting Your Crypto: Beware of Phishing Scams Targeting Celsius Users

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