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UK Crypto Exchange Halts Trading After $22 Million Lost in ‘Security Incident’ – DL News
- Lykke says someone gained “unauthorized access” to the exchange.
- Onchain investigator SomaXBT says the exchange has been hacked.
- Depositors cannot withdraw from the platform, but Lykke says the funds are safe.
In a sign that crypto hackers are exploiting private keys, Lykke, a UK-based cryptocurrency exchange, halted trading on June 6, citing “unauthorized access” to its platform.
The closing occurred two days after the exchange violatedaccording to SomaXBT, a web researcher, who first reported the incident.
The exchange is supported $22 million in suspicious outflows, said Taylor Monahan, MetaMask developer and crypto defense expert.
Impossible to retreat
Lykke has seen cumulative volume of $2.5 million over the past month. Lei users are currently unable to withdraw their assets from the platform, and many of them say their account balances have been emptied – another sign that the exchange may have been hacked.
According to onchain data, half of the sum was in Bitcoin and the rest was a mix of Ether, Litecoin and Bitcoin Cash.
Also onchain data Shows the Ether withdrawn from the exchange was immediately exchanged for the DAI stablecoin, issued by MakerDAO.
At the same time, the stolen Bitcoin was split between several wallets – a common tactic used by hackers to obscure the transaction trail when attempting to launder stolen funds.
The exchange has been largely silent about the incident. On June 6, b Lykke CEO Richard Olsen apologized for the platform’s downtime in an email sent to customers.
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Security incident
“We are still investigating the causes of this security incident,” Olsen said in the email seen by DL News.
“In the meantime, you can rest assured that your funds are safe,” Olsen said. “Lykke is a diversified company with strong capital reserves.”
That of exchange website currently displays a message saying the platform is “under maintenance due to security” and will remain “down with further notice.”
Lykke did not immediately respond DL News’ requests for comment.
Lykke is the second cryptocurrency exchange to have been hacked in the last two weeks after DMM Bitcoin saw $320 million stolen from its platform on May 31.
Loss of private key
With 2024 almost halfway there, cryptocurrency theft this year it surpassed $582 million, DefiLlama data Shows.
This figure exceeds the $433 million recorded in the first half of last year.
Most of the major hacks this year were due to private key leaks, a security issue identified by cybersecurity firm Cyvers as a potentially big concern for crypto companies.
The first half of 2024 will see more cryptocurrency thefts than the same period last year.
Private keys work like passwords and control access to crypto wallets. If hackers gain control of a cryptocurrency company’s private keys, they can steal all the funds it holds in affected wallets.
Last year, Cyvers research revealed that 85% of the $900 million stolen from DeFi exchanges, bridges and protocols in the second half of the year was due to private key leaks.
Cyvers co-founder Meir Dolev said this previously DL News the problem could become more endemic to cryptocurrencies if industry players fail to take security measures.
The DMM Bitcoin hack, the largest cryptocurrency theft this year, has been blamed on the leak of private keys.
Onchain investigators say the Lykke security breach exhibits similar characteristics.
Osato Avan-Nomayo is our DeFi correspondent based in Nigeria. He covers DeFi and technology. To share story tips or information, contact him at osato@dlnews.com.