Japanese cryptocurrency exchange Liquid announces it was hit by hackers in a theft. The market expects the loss of the crypto hack to about $97 million. It is the second major crypto heist to take place in little over a week, following the Poly Network hack.
“We are sorry to announce that #LiquidGlobal warm wallets were compromised, we are moving assets into the cold wallet,” Liquid says on Twitter. It confirms that Bitcoin (BTC), Ethereum (ETH), XRP, and TRX coins were stolen in the hack.
The exchange has suspended all customers’ deposits and withdrawals, and is working with other exchanges to freeze and recover funds.
Hackers made off with $97 million in crypto, according to blockchain analysis firm Elliptic. The hacker is converting those tokens to ETH via decentralised exchanges (DEX).
To specify, a “hot” or “warm” wallet is connected to the internet. Hot wallets allow users to trade or spend crypto faster and easier. Yet, hot wallets are relatively vulnerable to online attacks — which could lead to stolen funds. A cold wallet is offline, so while it may be more secure, it is less convenient to access.
Hot Wallets, Decentralized Exchanges and Crypto Hacks
The Liquid crypto hack would be on par with breaches at CoinCheck ($500 million) in 2018 and Mt. Gox in 2014 ($460 million).
Founded by CEO Mike Kayamori in 2014, Liquid’s parent company is Quoine, a company operates under the license of Japan’s Financial Services Agency. The Japanese crypto exchange ranks among the top 20 crypto exchanges globally by daily trading volumes. It is processing more than $133 million of transactions in the last 24 hours, according to CoinMarketCap.
In 2019, Liquid hit unicorn status with its Series C funding that puts the company valuation at over $1 billion.
Last week, cross-chain DEX Poly Network was under attack, with the hacker draining about $600 million in ETH and other tokens.
Later, hackers are returning nearly all of the funds they stole to “save the project”. Additionally, Poly Network promises the hacker a $500,000 bounty for discovering the exploit.. It also invites the hacker to become its “chief security advisor.”
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