Poloniex Restores Withdrawals Following $100M Hack Incident
Poloniex stated that it has essentially finished restoration work and is set to restart operations following the November 10 massive breach.
Poloniex, the cryptocurrency exchange that had a massive breach attack on November 10 for more than $100 million, has issued an update on its recovery efforts. The firm stated that the efforts to re-establish its activities were nearly complete and that the cryptocurrency exchange was running well.
Poloniex’s team has hired a security consulting firm to strengthen the platform’s defenses. The firm will restart deposits and withdrawals after the audit is completed.
Poloniex Combats Security Risks
Justin Sun, the owner of Poloniex, has been highly active in dealing with the fallout from the breach. Sun informed consumers that they would be paid immediately following the security incident. He highlighted that the exploit had had no effect on Poloniex’s financial condition and that he was working with other exchanges to retrieve the stolen assets.
PeckShield and Cyvers, two blockchain security organizations, discovered this security breach. Poloniex was compelled to stop its wallets due to the red flags. Sun, a Poloniex investor and Tron founder confirmed the intrusion and gave the hackers a “white hat bounty” as a reward to return the riches.
Coordination of Attacks on Several Blockchains
On-chain data indicated that many wallets across several blockchains had been targeted, revealing the attack. An Ethereum wallet known as the “Poloniex hacker” carried out 357 transactions, stealing $114 million in tokens from Poloniex.
Simultaneously, a Tron blockchain wallet delivered around $42 million to numerous locations. This is the latest in a string of high-profile cryptocurrency exchange thefts. Recent breaches at HTX, Gdac, and Deribit resulted in damages ranging from $8 million to $28 million.
Our wallet has been turned off for maintenance. Once the wallet has been re-enabled, we will change this topic.
November 10, 2023 — Poloniex Customer Support (@PoloSupport)
Data from the blockchain According to Decrypt, Arkham Intelligence uncovered the loss of roughly 288 million TRX and 865 Bitcoin, totaling a whopping $126 million. Furthermore, in the security compromise, $2.5 million in stolen Golem tokens were transmitted to the token contract instead of the targeted secondary addresses.
Table showing the hacked Poloniex assets. (Source: Tom Wan)
Poloniex Is Dealing With Regulatory Issues
The security mishap added to Poloniex’s difficulties following a $7.6 million settlement imposed by the US Treasury Department’s Office of Foreign Asset Control earlier this year. Poloniex was accused of sanction breaches, which resulted in the settlement. Between 2014 and 2019, the company is suspected of letting customers from sanctioned countries, including Crimea, Cuba, Iran, Sudan, and Syria, participate in digital asset trading.
Poloniex, which debuted in January 2014, instituted compliance procedures in May 2015. However, even after completing its KYC standards, the exchange reportedly continued to enable existing clients from prohibited locations to trade.
The breach
Sun said earlier on November 10th, that Poloniex was investigating a hacking issue without offering any more details.
While Sun did not divulge the scope of the assault, blockchain security firm CertiK said that its technology identified a suspicious transaction of $31 million in digital assets from Poloniex 4, one of the exchange’s hot wallets.
Scopescan, a cryptocurrency analytics business, revealed that the Poloniex account moved all tokens to a new address, ‘0x0A59,’ in 40 minutes, for a total value of around $60 million. The stolen monies were also aggressively moved to other addresses and converted to Ethereum (ETH) by the new address. According to the most recent figures available at the time of publication, Poloniex’s losses had surpassed $100 million.
The counterfeit assets include bankrupt Voyager VGX coins, Pepe, Polygon’s MATIC, Aave, TrueUSD stablecoin, Chainlink’s LINK, and others, according to on-chain data.
Closing Thoughts
This is not Poloniex’s first experience with regulatory issues. In 2021, the site paid the US Securities and Exchange Commission more than $10 million to resolve claims of running an unregistered digital asset exchange.
