Poloniex, a popular cryptocurrency exchange, has been the victim of a significant hack resulting in an estimated loss of about $114 million, as per on-chain data. Justin Sun, the founder of Tron and investor in Poloniex, confirmed the hack and announced that affected users would be reimbursed. He also offered a white hat bounty to the hacker responsible for the exploit. The details of the hack were initially brought to light by blockchain security firms PeckShield and Cyvers. Poloniex promptly disabled its exchange wallet for maintenance following these alerts.
Investigation and Recovery Efforts
After disabling the wallet, Poloniex released a statement acknowledging the hack and assured users that they would be fully reimbursed for any losses incurred. Data from Arkham revealed that multiple wallets across different blockchains were targeted, with a total of $114 million worth of tokens sent out in 357 transactions. Additionally, a Tron blockchain wallet sent $42 million to various other wallets. The exact method used by the hacker to exploit the wallet remains unknown.
Poloniex was acquired by Circle in 2018 before being spun off to various investors, including Justin Sun. Despite facilitating $616 million in trading volume over 24 hours, the exchange’s reserves are not publicly viewable. This contrasts with market leaders Binance and Coinbase, which boast trading volumes of $19.3 billion and $3 billion respectively.
Rising Frequency of Exchange Hacks
Cryptocurrency exchanges have increasingly become targets for hackers in recent times. HTX, Gdac, and Deribit are just a few examples of exchanges that have fallen victim to major hacks resulting in significant financial losses. In the case of Poloniex, it was reported that the hacker purchased $20 million worth of TRX, causing the token’s price to surge by more than 25%. Nansen, a blockchain analytics firm, noted that only 175 tokens valued at around $10,000 remained in the Poloniex wallet.
White Hat Bounty Offered
In response to the hack, Justin Sun announced that Poloniex was prepared to offer a 5% white hat bounty to the hacker with a seven-day acceptance deadline. If not accepted within this period, Poloniex would involve law enforcement agencies in an attempt to recover the funds. Sun also mentioned that some assets linked to the hacker had been identified and frozen by Poloniex. He reassured users that their losses were manageable and could be covered by the exchange’s operating revenue.
Hot Take: Growing Threats to Crypto Exchanges
The recent hack on Poloniex highlights the increasing threats faced by cryptocurrency exchanges from cybercriminals. As these platforms continue to attract significant trading volumes and hold large amounts of digital assets, it is imperative for them to enhance their security measures to safeguard user funds effectively.
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