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Crypto Exchange CoinEx Shares Post-Hack Updates

Photo for the Article - Crypto Exchange CoinEx Shares Post-Hack Updates

Following the recent attack on the international crypto exchange CoinEx, the firm shared how it responded to the incident as well as what it will do going forward.

CoinEx Response

In a statement CoinEx shared how the firm responded swiftly upon discovery of the exploit. Starting with an immediate statement of apology, the company vowed to “make users whole” by compensating whatever funds are lost.

“We deeply regret the recent hack and extend our sincerest apologies to those affected. Your concern and attention have not gone unnoticed,” Yang tweeted.

In a statement, the exchange stated that it provided real-time progress updates and regular communication with users in response to the issue. This communication included information on the investigation’s progress, recovery efforts, and security enhancements implemented to prevent future breaches.

Yang also noted that the exchange had traced the stolen funds and the hacker’s addresses, secured the remaining user assets, and reached out to industry experts for assistance.

Next Steps

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In his tweets, Yang emphasized that the exchange will be resuming withdrawals after building a new wallet system.

“Our team is currently focused on building and deploying an entirely new and robust wallet system to handle activities within the 211 chains and 737 assets,” the firm guaranteed

The exchange also stressed that it will be committed to further improving security and risk management by upgrading their systems, setting up a risk-prevention fund, and collaborating with security firms and industry partners. 

Prior to this, the exchange had promised its affected users full compensation, which would be covered by the CoinEx User Asset Security Foundation.

CoinEx Hack

On September 12, 2023, CoinEx experienced a security breach involving unauthorized cryptocurrency withdrawals, primarily from hot wallets, raising concerns of a potential hack. The firm disclosed affected assets totaling approximately $70 million (around ₱3.9 billion).

CoinEx emphasized that only hot wallet assets were affected, while cold wallets remained secure. 

In response, the exchange suspended deposit and withdrawal services, shut down the hot wallet server, and securely transferred remaining assets to protected addresses. CoinEx urged users not to deposit to old addresses during wallet system reconstruction, which involves 211 chains and 737 coins, to prevent further asset losses. 

How did other entities respond to hacks?

In 2022, CoinGecko revealed that the cryptocurrency industry suffered a substantial loss of $2.77 billion due to hacking and exploiting incidents, marking the highest annual loss since 2013. 

Last April, Trust Wallet discovered a WebAssembly (WASM) vulnerability on its open-source library Wallet Core that led to almost $170,000 in total losses, the cryptocurrency wallet assured its users that their funds are safe and affected users were reimbursed.

In 2022, during the Axie Infinity exploit of 173,600 Ethereum (ETH) and 25.5 million USD Coin (USDC), which are worth a combined $625 million, Sky Mavis also reimbursed its users by raising funds from Binance and Animoca. 

Also last year, Binance’s BNB Chain experienced a “potential exploit”, Binance CEO Changpeng Zhao estimated the attacker only succeeded in taking $100 million, with $7 million already frozen. In response, BSC coordinated a shutdown to address issues with the BSC Token Hub protocol. The chain was immediately back online and planned on-chain governance votes to determine whether the hacked funds should be frozen and to establish a bug bounty reward system for future security.  

Locally, although it is not really crypto-related, homegrown e-wallet GCash also suffered an exploit when a cybertheft attempted to steal ‌₱37 million-worth of digital money. The e-wallet provider and its partner banks immediately freezed the hacker account and returned the money to its affected users. 

This article is published on BitPinas: Crypto Exchange CoinEx Shares Post-Hack Updates


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