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On Thursday, Tokyo-based Japanese crypto exchange Liquid revealed hackers had compromised it. Liquid did not exactly put up any figure on the amount stolen from the warm wallets. However, Elliptic estimated the hackers made away with about $97 million in digital coins.
The figure included $31 million in ether, $5 million in bitcoin, $13 million in XRP, and stablecoins. $45 million of the amount was in Ethereum tokens.
Liquid said that the conversion of the digital assets to ether is underway. This move will block the hackers from freezing the assets.
How the Hack Transpired
The hackers transferred heisted funds to different wallets. Liquid Global noted that one of the addresses was still receiving bitcoin at 7:20 UTC. The company has written four tweets [1, 2, 3, and 4] with addresses that the hackers had drawn away funds.
Hot wallets, which were compromised, are usually based online and allow users to access cryptocurrencies easily. Liquid Global noted that they are transferring assets into the cold wallet. The wallets are offline, more complex to access, and safer. At the same time, the firm confirmed the suspension of deposits and withdrawals.
Keeping Up with the Hackers
Johnny Lyu, Crypto exchange KuCoin’s CEO, assured investors that everything is under control. They continue to work on the clock to normalize things. The firm is tracking down the movement of the digital assets and has gone further to block the hacker’s wallet addresses. Other exchanges would also assist them in recovering the funds. The firm will provide regular updates in due time.
Liquid Global is among the 20 most significant crypto exchanges, ranked by daily trading volume per CoinMarketCap. In the past 24 hours, it has traded almost $140 million in crypto.
Liquid claimed in a blog post on the incident that the hack baited a multi-party computation (MPC) wallet. The company said the MPC wallet, which manages cryptographic assets and is utilized by Liquid Singapore subsidiary QUOINE PTE, had been hacked.
MPC is an advanced cryptographic protocol, and a set of parties generates its private key to control funds. The technique does not compromise the security and privacy of data. No single party can see the fragments calculated by the others.
The news of the hack comes over a week after hackers took $600 million in cryptocurrency from Poly Network, a so-called decentralized finance firm. This was possibly the biggest heist ever in the world of decentralized finance.
Those attackers gave back half of what they stole the following day. They eventually returned almost all of it ($135 million remains locked in an account that requires a password from the hacker).