Cyber Attack on Crypto Exchange brings $97 million loss to customers

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Japan-based Cryptocurrency Exchange Company named ‘Liquid’ was reportedly hit by a cyber attack after which the cyber crooks managed to pull $97 million directly from the e-wallets of several customers.

Highly placed sources suspect a well known cyber criminal gang behind the attack and have launched a separate investigation that also includes security veterans from the law enforcement.

Currently, the officials are busy in tracking down the individual/gang behind the attack and are looking for ways to compensate the currency that was lost by the customers.

Liquid that allows buying, selling and trading of various crypto currencies has discovered from its probe that it could have lost $45 million in Ethereum, $22 million in BTC, some coins in XRP and other stable coins such as Tether.

Although the firm has kept the exact amount of steal under wraps, blockchain analytics firm Elliptic stated that the attack could have brought a loss ranging in between $80 to $97 million in total.

All deposits and withdrawals worth $16 million were temporarily suspended and have moved all its customer funds to cold wallets that are more secure and will remain so until the investigation on who stole the funds gets ended.

NOTE 1- In the year 2020, Japan amended its Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) that demands all crypto currency exchanging firms operating in its region to separate the money of its customers from the finances that are meant for company operations. Therefore, these exchange websites could maintain ‘Cold Wallets’ or outsource their e-wallet storage capabilities to third companies.

NOTE 2- Most companies in the said business are still found using ‘Hot Wallets’ that are strictly against the prevailing norms of the PSA & FIEA act.

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Naveen Goud is a writer at Cybersecurity Insiders covering topics such as Mergers & Acquisitions, Startups, Cyber Attacks, Cloud Security and Mobile Security