Japanese Cryptocurrency Exchange Loses $97m to Cyber-Thieves
A Japanese cryptocurrency exchange has fallen victim to a major cyber-attack, resulting in an estimated loss of $97m. Tokyo-based Liquid announced the breach, stating that their warm wallets had been compromised, prompting them to transfer assets to cold storage. As a result, all deposits and withdrawals have been temporarily suspended while investigations are ongoing.
According to blockchain analysis company Elliptic, the hackers managed to steal nearly $100m in various cryptocurrencies, including Ether, XRP, Bitcoin, Tron, and Stablecoins. Of particular concern is the $45m in Ethereum tokens, which are being converted into Ether through decentralized exchanges to evade freezing of the assets.
Elliptic has already identified the wallet addresses associated with the thief and is working closely with Liquid to track the stolen funds. The company ensures that its clients will be alerted if any of these illicit funds are detected. Liquid, with its extensive customer base, global presence, and high trading volume, is a significant player in the cryptocurrency market.
This incident is not an isolated one in Japan, as several other exchanges have been targeted in the past. Mt. Gox, one of the largest cryptocurrency exchanges at the time, suffered a massive loss of around $500m in 2014, leading to its closure. Other notable victims include Coincheck, Zaif, Bitpoint, and UpBit, with losses ranging from tens of millions to hundreds of millions of dollars.
There have been suspicions that some of these attacks may have ties to North Korea, as a UN report in 2019 suggested that the regime had accumulated billions through cyber-attacks on financial institutions and exchanges. The recent Poly Network heist, where over $600m was stolen, highlighted the vulnerability of cryptocurrency platforms to such attacks. Fortunately, in this case, the hackers returned most of the funds shortly after the theft.
As the cryptocurrency industry continues to face security challenges, exchanges like Liquid are under increasing pressure to enhance their security measures and protect customer assets from sophisticated threat actors.