Lykke Cryptocurrency Exchange Suspends Withdrawals Following $22M Security Breach
Summary:
The Lykke cryptocurrency exchange halted withdrawals following a security breach on June 4 that impacted both Lykke UK and Lykke Corp AG. Despite blockchain security investigator SomaXBT claiming the exchange lost $19.5 million in the breach, Lykke assured users their assets were safe and would be restored. The exchange is pursuing a criminal investigation, and it hired a cybersecurity team for asset recovery and blocking, with the team estimating a total loss of over $22 million due to the incident.
On June 10, following a security breach on June 4, the Lykke cryptocurrency exchange declared a halt on withdrawals. A public announcement reassured users that their assets were secure and would be restored. The incident impacted both Lykke UK and Lykke Corp AG according to the statement.
Following up on the same thread, another post indicated that the freeze on withdrawals was an action taken to avoid further complications. The Swiss-based Lykke, a centralized cryptocurrency exchange established in 2015, positions itself as a "fee-free crypto exchange" originating from a former notable forex broker, as stated on their website.
Blockchain security investigator SomaXBT claimed to have identified the breach on June 9. They alleged Lykke’s team was concealing the security violation, stating "Lykke CTX suffered an exploit, lost $19.5 million in cryptocurrencies and is still attempting to cover this up." In a subsequent post, SomaXBT included a screenshot of a Discord message allegedly from Lykke, announcing an unexpected full system maintenance.
On June 8, a Lykke subscriber expressed on X that the exchange was dysfunctional and rumors were spreading about a potential hack. The Lykke team officially acknowledged the breach in a post on June 10, expressing apologies to affected users. “We deeply regret the inconvenience and worry this breach has caused our clients and partners,” read the post. It also highlighted the exchange's strong financial reserves and diverse portfolio, asserting the safety of client funds.
Lykke stated they have located the IP addresses associated with the attacker for a legal investigation. They have hired a cybersecurity team to work on the recovery and blocking of the stolen assets. The team’s estimates suggest a total loss of more than $22 million due to the breach.
Blockchain researchers keep revealing unrecognized security breaches on centralized exchanges. For example, on April 19, blockchain investigator ZachXBT disclosed a $14.1 million hack on the Rain exchange from two weeks prior. Rain later admitted to this breach but assured that no client funds were lost as the flaw was immediately secured using their own reserves.
Published At
6/10/2024 10:23:05 PM
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