KuCoin stolen: hackers or partners? Losses may exceed $50 million

On the 26th, the well-known exchange KuCoin was suspected of being stolen, which attracted industry attention. However, there are still doubts about who is stealing the coins.

At 9 a.m. on the 26th, someone suddenly broke the news on social media such as Twitter that more than 150 million U.S. dollars had been stolen from KuCoin, including 20 million Usdt, 11,000 Ethereum, and a large number of other ERC-20 tokens.

At 10:38, KuCoin responded, saying that it had detected a large withdrawal at 3 a.m. and discovered that some Bitcoin and ERC-20 tokens in hot wallets were transferred out of the exchange.

At 12:30 noon, KuCoin CEO conducted a live broadcast on YouTube and responded to a large number of questions. He said:

1: The hot wallet private key was attacked by hackers.

2: We have urgently contacted major exchanges to block suspicious addresses.

3: The international police have been notified.

4: Cooperate with project owners to track, block and fork related projects to minimize losses.

5: Withdrawals will be resumed within one week.

But what is puzzling is that the word “hacker” did not appear in subsequent official announcements of KuCoin or previous announcements, nor was the specific attack method of the hacker disclosed.

The term "hacker" was also deleted from the official text of the "CEO Live Broadcast".

According to an insider, another theory within KuCoin is that a partner or insider who holds the private key of the hot wallet carried out this operation. This theory is also questionable, because if it is a partner or an insider, KuCoin should know its specific information better, and it is easy to track down or even disclose it. KuCoin has already issued a bounty of $100,000.

KuCoin responded that the identity of the person who stole the coins is still under investigation, and for the sake of rigor, he was not called a hacker in the official announcement.

If it is a partner or an insider, the outside world may have some doubts about KuCoin's internal management, especially the chaotic management of hot wallet private key control. Some security experts also said that it is possible that hackers entered the wallet server through a vulnerability and operated to read private keys or perform transfer signature operations. The current information cannot completely conclude that it was done by an insider.

As for the exchange colluding with others to steal, it is completely illogical. KuCoin is not a fourth- or fifth-tier exchange that can run away at any time, so there is no possibility of it doing such a thing.

The good news is that the "central bank" of cryptocurrency has taken action. Bitfinex said that it has successfully frozen a total of 2,000,000 USDT on OMNI and TRON. As of now, a total of 22,000,000 USDT (22 million US dollars) have been frozen. Matcha proactively disclosed that it had frozen a small amount of finance transferred to it (11,000 USD), and Binance also confirmed that it had frozen the relevant funds.

However, it is unlikely that Bitcoin and Ethereum can be recovered at present. According to people familiar with the matter, the total amount of Bitcoin, Ethereum and other mainstream currencies is about 40 million US dollars. If altcoins are included, the total amount of losses may be no less than 50 million US dollars.

KuCoin has repeatedly stressed that if any user suffers losses in this incident, all losses will be borne by KuCoin and its insurance fund. KuCoin is a unique second-tier exchange with many overseas users.

There are rumors that KuCoin has obtained the KYC information of the thief, which is believed to be helpful in tracking down the thief.

Currently, all major exchanges, project owners, police, and security companies are trying their best to track down the person, whether it is a hacker, a partner, or an insider. This is a war against one person in the industry. Industry insiders hope that KuCoin can be resolved smoothly in the end, just like the previous DForce theft incident. (Author: Colin Wu)

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