Days after decentralized finance firm, PolyNetwork was hacked into, Japanese cryptocurrency exchange Liquid has been hacked, the firm reported. The exchange has frozen all cryptocurrency transactions for now, in a bid to safeguard them from misappropriation.
The company also confirmed that 69 different cryptocurrencies were affected by the hack. Since cryptocurrencies are built to record all transactions in a public ledger, the company was able to list the addresses where these cryptocurrencies were diverted to, after the hack, as well as the further movement of the crypto coins.
Liquid’s security team is still analyzing the impact but also able to confirm unauthorized access for some of its wallets at 07:50 AM on August 19. Following this access, 69 cryptocurrencies were misappropriated. The company pegs its value to be US$91 million.
Since cryptocurrencies are meant to record all transactions on the public ledger, the exchange was quick to identify the addresses, where these crypto coins were first transferred to and then further moved. It has also released a list of these addresses on its blog.
Liquid also reached out to the crypto community at large and was also aided promptly. With their help, the exchange was successful in freezing assets worth, US$16.13 million, the company confirmed.
However, there are also some services that allow ‘mixing’ or ‘tumbling’ of coins. This can help the hackers move the coins by hiding their source, to avoid tracking. Blockchain analytics firm, Elliptic told CNBC that it estimates $45 million worth of crypto coins were swapped for Ethereum on exchanges such as UniSwap and Sushiswap. Ethereum is open-source blockchain technology that serves as a base for many other crypto coins. This allows users to simply swap their crypto coins, taking away the platform’s ability to freeze their transactions.
Unlike the PolyNetwork hack, where the exchange reached out to the hacker and was promptly received its monies back, Liquid hasn’t made such a move yet. It claims to be backed by the Japanese Financial Services Agency, but CNBC wasn’t able to confirm this.
Liquid has instructed its users not to deposit any crypto coins in their wallets until further notice. Since its wallet also supports fiat currencies, the exchange has clarified that those transactions are not affected by the hack. Further updates will be added if we receive any from the company.