HomeCrypto UpdatesCoinEx Guarantees Full Compensation in the Wake of Recent Attack

CoinEx Guarantees Full Compensation in the Wake of Recent Attack

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Following a security breach that impacted hot wallets, CoinEx has halted withdrawals and vowed to fully compensate affected users.

Security firms peg losses from the CoinEx hack at up to $53 million, including multiple cryptocurrencies like BTC and ETH.

CoinEx moves remaining assets to secure addresses and collaborates with blockchain firms to freeze compromised wallets.

In light of the recent security breach, international cryptocurrency exchange CoinEx has assured its affected users that the firm will implement a 100% compensation plan.

Update: Coinex Founder Haipo Yang issued a statement:

To all CoinEx users & friends: We deeply regret the recent hack and extend our sincerest apologies to those affected. Your concern and attention have not gone unnoticed.

— Haipo Yang (@yhaiyang) September 14, 2023

In response to the hack where the exchange detected anomalous withdrawals from several hot wallet addresses, CoinEx said it activated its Risk Control System and formed an investigation team. They also pledged to provide 100% compensation for any losses incurred due to the breach. 

“We assure all users: your assets are secure and untouched. Affected parties will receive 100% compensation for any loss due to this breach. For added security, deposit & withdrawal services are temporarily suspended and will resume after a thorough review.”

Coinex

According to the firm, CoinEx User Asset Security Foundation will be responsible for covering the financial losses incurred as a result of this incident.

Amidst growing concerns, CoinEx assured users that asset security remained a top priority. Although withdrawals were temporarily halted, the exchange vowed to resume them once the hacker addresses were fully identified and isolated following a comprehensive review. 

As of the latest update, CoinEx is still assessing the extent of losses incurred and it pledges to keep stakeholders informed as the situation unfolds.

What Happened?

CoinEx faced a security breach on September 12, 2023, when unauthorized withdrawals of cryptocurrencies, including Ethereum (ETH), TRON (TRX), and Polygon (MATIC), were detected. The withdrawals from CoinEx’s hot wallets to unknown addresses raised concerns of a possible hack. Initial alerts indicated that the losses could amount to $27 million.

A report from blockchain security firm PeckShield estimated that the attack resulted in losses of approximately $19 million in ETH, $11 million in TRON, $6.4 million in Smart Chain Coin (BSC), $6 million in Bitcoin, and roughly $295,000 in MATIC. According to PeckShield’s analysis, the total loss from the attack is around $43 million, while the remaining $72 million in the same stash has been transferred to more secure cold wallets.

On the other hand, another estimate, as analyzed by CertiK Alert, has been raised to $53 million.

As of writing, the crypto exchange disclosed the affected assets which only totals to $52.7 million. (approximately ₱360 billion).

CoinEx has stated that only the assets in its hot wallets were affected by the recent hack; the cold wallets were not targeted. Hot wallets are more vulnerable to hacks than cold wallets, which are kept offline, because they are connected to the internet and can be accessed by hackers.

Currently, the exchange has shared that it already initiated a series of actions: these include the temporary suspension of deposit and withdrawal services for all cryptocurrencies, an emergency shutdown of the hot wallet server, and the secure transfer of remaining assets from the compromised hot wallet to protected addresses.

CoinEx stressed that while it is rebuilding its wallet system, which includes 211 chains and 737 coins, users should not deposit to old addresses to avoid further asset losses.

Hacker Wallets

Consequently, the exchange published the first batch of compromised wallet addresses on September 12 and contacted blockchain organizations to freeze them. The second batch of addresses was revealed on September 13 and included assets such as Ethereum (ETH), XRP, Solana (SOL), Binance Smart Chain (BSC), Kadena (KDA), Bitcoin Cash (BCH), and XDAG.

The list of the hacker’s wallets will be updated regularly as the investigation progresses and can be viewed here. 

What is CoinEx?

CoinEx, a cryptocurrency exchange founded in 2017, initially focused on Bitcoin Cash (BCH) following the first hard fork of the world’s largest cryptocurrency. In 2020, it underwent a major expansion, offering futures trading, leveraged trading, options trading, and access to over 100 token projects.

“In these challenging times, we earnestly seek your understanding and patience. Our priority has always been, and will continue to be, the security and trust of our users. We deeply regret any distress this may have caused and assure you of our unwavering dedication to safeguarding your interests,” the firm tweeted. 

(Read: Coinex Mid-Year 2023: Highlights and Outlook) 

 This article is published on BitPinas: CoinEx Assures 100% Compensation Following Recent Attack

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