Lykke Exchange Suffers $22 Million Hack: Suspends Trading and Withdrawals

  • June 11, 2024
  • 10 Views

TLDR

Lykke, a UK-based crypto exchange, has halted withdrawals and trading after suffering an exploit on June 4, which resulted in the loss of approximately $22 million in various cryptocurrencies.
The attack was first discovered by blockchain security researcher SomaXBT, who accused the Lykke team of attempting to hide the security breach.
Lykke has acknowledged the attack and stated that both Lykke UK and Lykke Corp AG were affected, apologizing for the inconvenience caused to clients and partners.
The exchange claims to have solid capital reserves and a diverse portfolio, assuring users that their funds are safe and will be recovered.
Lykke has hired a cybersecurity firm to help block and recover the stolen assets and has launched a criminal investigation into the incident using the attacker’s discovered IP addresses.

Lykke, a prominent UK-based cryptocurrency exchange, has found itself in the midst of a significant security breach, leading to the loss of approximately $22 million in various digital assets.

The incident, which occurred on June 4, has forced the exchange to suspend trading and halt withdrawals as a preventative measure, causing concern among its users and the broader crypto community.

The attack was first brought to light by blockchain security researcher SomaXBT, who accused the Lykke team of attempting to conceal the security breach. In a post on social media, SomaXBT claimed that the exchange had lost $19.5 million worth of crypto assets but was still trying to hide this fact.

The researcher provided a screenshot of a Discord message reportedly from the Lykke team, stating that the exchange was undergoing “unscheduled full system maintenance.”

Lykke UK and Lykke Corp AG (Lykke) suffered an attack on their infrastructure on June 4. The affected systems were immediately shut down to limit damage. The identified security breaches have been thoroughly examined and fully addressed.

— LykkeZero-fee crypto exchange (@lykke) June 10, 2024

As reports of the hack began to circulate, Lykke users took to social media to express their concerns. Some users complained that the exchange was not functioning properly and that there were rumors of a hack. Others reported that their account balances had been emptied, further fueling speculation about the severity of the security breach.

On June 10, Lykke finally acknowledged the attack in a social media post, confirming that both Lykke UK and Lykke Corp AG had been affected.

The exchange deeply apologized for the inconvenience and concern caused to its clients and partners, assuring them that their funds were safe and would be recovered.

According to Lykke, the exchange possesses solid capital reserves and a diverse portfolio, which will enable it to weather any potential losses from the attack. The team emphasized that client funds are secure, and they are working diligently to resolve the issue.

In response to the hack, Lykke has taken several steps to mitigate the damage and recover the stolen assets. The exchange has hired an external cybersecurity firm to assist in blocking and recovering the stolen funds.

Lykke claims to have discovered the IP addresses of the attacker, which will be used to launch a criminal investigation into the incident.

on June 4, @lykke CTX got exploited and lost $19.5 million worth crypto assets but team still trying to hide this fact

BTC (158 btc)
bc1qt64756h9aylujm9tpk826zndegpxtngmr6eqad

ETH (2161 eth)
0x9172a72f5009ca609833819763A2722e53806443 pic.twitter.com/bT4TaQLukY

— SomaXBT (@somaxbt) June 9, 2024

The Lykke hack is the latest in a series of security breaches targeting centralized exchanges. In April, the Rain exchange was hacked for $14.1 million, although the company later stated that no customer funds had been lost, as it had plugged the hole immediately using its own reserves.

The increasing frequency of such attacks highlights the ongoing security risks associated with centralized exchanges and the need for robust measures to protect user funds.

As the cryptocurrency industry continues to grow and mature, exchanges must prioritize the implementation of advanced security protocols and regular audits to prevent such incidents from occurring.

The Lykke hack has also reignited the debate surrounding the transparency and accountability of centralized exchanges.

Many in the crypto community have called for greater regulatory oversight and the adoption of decentralized solutions to mitigate the risks associated with centralized platforms.

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