KuCoin Loses More Than $150 Million Worth of Crypto in Hack, Says It Will Cover Losses For Users

Key highlights:

• KuCoin has lost more than $150 million worth of crypto in a security breach
• The exchange says its insurance fund will be able to cover any losses suffered by users
• The exchange says its cold wallets were not affected

Attacker(s) take off with KuCoin's hot wallet funds

The KuCoin cryptocurrency exchange has suffered a security breach in which the exchange’s hot wallets were drained. The Ethereum address that the KuCoin funds were transfered to currently holds $4 million worth of ETH and a whopping $152 million worth of ERC-20 tokens. The attackers also stole BTC from KuCoin’s hot wallet.

In terms of the value of the stolen funds, the KuCoin hack is the biggest cryptocurrency exchange hack of this year. The year has been surprisingly quiet on the hacking front up until now, with security breaches mostly involving smaller exchanges and amounts.

If KuCoin’s statements are to be believed, the exchange’s users won’t see any long-term consequences resulting from the hack. According to a post by KuCoin, any users who suffered losses will be reimbursed through the exchange’s insurance fund:

»Please rest assured that if any user fund is affected by this incident, it will be covered completely by KuCoin and our insurance fund.«

KuCoin CEO Johnny Lyu appeared on a livestream and stated that the exchange’s cold storage wallets were unaffected by the security breach. In the livestream, Lyu said that the stolen funds represent »a small part« of the exchange’s total holdings.

KuCoin has contacted crypto industry players as well as law enforcement

KuCoin says it has contacted a number of cryptocurrency exchanges to make sure the addresses associated with the hack are blacklisted. The exchange’s team also added that they are offering a $100,000 reward for information about the attack, and have reported the incident to »international law enforcement«.

Cryptocurrency industry players are already responding to the incident - Bitfinex and Tether CTO Paolo Ardoino says the two companies have frozen 33 million USDT tokens that could be controlled by the attacker.

PSA: re #KuCoin hack@bitfinex froze 13M Tether USDt on EOS as part of the hack@Tether_to just froze 20M Tether USDt sitting on this Ethereum address https://t.co/GYmESH44da as precautionary measure.

Stay safe everyone!

— Paolo Ardoino (@paoloardoino) September 26, 2020

After trending downwards in the past week, the value of KuCoin’s KCS token took another hit once the news of the hack started to spread. KCS is currently posting a -9% daily change.

Interestingly enough, the news of the KuCoin hack doesn’t seem to have had much of an impact on the cryptocurrency market at large. The total cryptocurrency market cap is up 1.7% in the last 24 hours, with all of the top 10 crypto assets posting a positive 24-hour change.