Russian cryptocurrency exchange Livecoin has been hacked, with hackers managing to change the rates of cryptocurrencies traded on the service to earn quick profits.
The hack took place over the night of Dec. 23-24. The exchange posted on its site Christmas Eve that the service was subject to a “carefully planned attack” that it suggested may have been planned “over the last few months.”
In the hack, the company lost control over all its servers, back ends and nodes along with “new channels,” presumably referring to social media accounts. Clients were asked to stop using the service, including not depositing funds, trading or using the site’s application programming interface.
Typically a hack of a cryptocurrency exchange would involve the theft of cryptocurrency from a hot wallet. That may have occurred here as well, but where things become strange is that the hackers changed the exchange rates offered on cryptocurrencies. ZDNet reported that those behind the attack set the exchange rate for bitcoin to $450,000, Ethereum to $15,000 and XRP to $17. Having changed the exchange rates, the hackers began cashing out accounts, generating profits in the process.
Also odd is how the funds were transacted, leaving a number of questions. Given that the hackers are said to have cashed out following the inflated exchange rates, did they withdraw cash or transfer amounts to other cryptocurrencies? If they withdrew in cash, which would appear to be one path, how did they manage to obtain those amounts?
Livecoin isn’t a particular large exchange. The site, prior to being hacked was listed as the 173rd largest cryptocurrency exchange in the world by volume. According to Coindesk, the exchange averaged $50 million in transactions daily before surging to $805 million when the hack first took place.
Hacks of cryptocurrency exchanges used to be a dime a dozen only a few years back but have dropped off somewhat as many companies have gotten their cybersecurity acts together. That said, they still exist and with bitcoin surging to record highs, hackers will undoubtedly be paying more attention to the segment.
Recent hacks included the theft of about $150 million from Singapore-based cryptocurrency exchange KuCoin in September and a smaller hack and theft of about $10 million in cryptocurrency from EXMO Exchange Ltd. last week.
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