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Poloniex Hot Wallets Breached: $114M Allegedly Stolen According to On-Chain Data

Poloniex Hot Wallets Breached: $114M Allegedly Stolen According to On-Chain Data

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HANZO

Nov 11, 2023 at 10:39 am

Poloniex, a prominent figure in the cryptocurrency exchange landscape, has recently fallen victim to a substantial security breach, resulting in an estimated loss of $114 million. The breach was initially uncovered when blockchain security firms PeckShield and Cyvers identified suspicious activity at approximately 10:55 UTC. Responding swiftly, Poloniex took immediate action by disabling its wallet for maintenance, publicly confirming the hack just 12 minutes later through an announcement made by investor Justin Sun.

Hi @Poloniex, you may want to take a look: @justinsuntron https://t.co/UobItZ9FpO
— PeckShield Inc. (@peckshield) November 10, 2023

????RED CODE????Hey @Poloniex @PoloSupport, you better contact us as soon as possible!!
— ???? Cyvers Alerts ???? (@CyversAlerts) November 10, 2023

Our wallet has been disabled for maintenance. We will update this thread once the wallet has been re-enabled.
— Poloniex Customer Support (@PoloSupport) November 10, 2023

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.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) November 10, 2023

This targeted attack aimed at a variety of wallets across different blockchains. According to data from Arkham, an Ethereum wallet labeled the "Poloniex hacker" executed 357 transactions, siphoning off tokens valued at $114 million. Concurrently, a wallet on the Tron blockchain initiated transfers totaling around $42 million to various destinations.

Before being frozen, the hacker's Tron chain address transferred large assets such as $21.73 million in USDT, $14.05 million in BTC, $3.65 million in USDD, and $1.78 million in USDC to other addresses, totaling more than US$42.83 million. Only $6.54 million is currently frozen.
— Wu Blockchain (@WuBlockchain) November 10, 2023

Established in 2013, Poloniex stands as one of the earliest cryptocurrency exchanges. Following its acquisition by Circle in 2018 and subsequent spin-off to investors, including Justin Sun, the platform has unfortunately become the epicenter of this notable security incident. Despite handling $616 million in trading volume over the past 24 hours, Poloniex's public reserves remain undisclosed on CoinMarketCap, distinguishing it from major exchanges such as Binance and Coinbase.

The cryptocurrency landscape has witnessed a surge in security breaches targeting exchanges in recent months, with notable incidents including HTX losing $8 million, Gdac facing a $13 million loss in April, and Deribit encountering a $28 million hot-wallet hack in November. The repercussions of the Poloniex hack extend beyond the immediate financial loss, as on-chain data suggests the hacker invested $20 million in Tron (TRX), resulting in a significant 25% surge in the token's price.

Blockchain analytics company Nansen reported a stark reduction in Poloniex's wallet holdings, with only 175 tokens remaining, valued at a mere $10,000. In response to the incident, Justin Sun assured affected users of Poloniex's financial resilience and pledged a complete reimbursement for the lost funds. Additionally, he introduced a 5% "white hat bounty" for the hacker, encouraging collaborative efforts to recover funds within seven days before involving law enforcement.

175 tokens valued at more than $10k have left Poloniex

Here's what they are, ordered from the last transaction out to: 0x0A5984f86200415894821bFEFc1c1De036DbF9e7

Continued...https://t.co/Oc6Fnpov0T pic.twitter.com/nunDFRipNS
— Nansen ???? (@nansen_ai) November 10, 2023

We are offering a 5% white hat bounty to the Poloniex hacker. Please return the funds to the following ETH/TRX/BTC wallets. We will give you 7 days to consider this offer before we engage law enforcement.
ETH Wallet: 0x176F3DAb24a159341c0509bB36B833E7fdd0a132 TRX:…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) November 10, 2023

In a subsequent update, Sun revealed that Poloniex had successfully identified and frozen a portion of the assets linked to the hacker's addresses. He reassured the community that the losses were manageable and within the exchange's operational revenue capabilities to cover. The incident is currently under investigation, with Poloniex actively exploring collaborative opportunities with other exchanges to expedite the recovery process.