Cryptopia's January Hack
The cryptocurrency exchange based in New Zealand has announced through several Twitter posts, that they have lost nearly 10% of all their holdings from a "security breach" experienced in mid January. Here we are about a month and a half later without any resolution and no trading taking place on this exchange.
Actually, as early as the 13th of January, they began announcing "unscheduled maintenance" of which there are 3 posts before they finally admitted they got hacked.
We are currently experiencing an unscheduled maintenance, we are working to resume services as soon as possible. We will keep you updated.
Update: We are still experiencing unscheduled maintenance. The next update will be at 8am NZDT (7pm UTC)
Update: We are still experiencing unscheduled maintenance. Our team is working hard to resolve this and we will provide an update soon.
And now the panic sets in. The exchange is stuck in maintenance mode until certain government agencies can sort things out. They later notify their users that they cannot provide an update but will provide one later.
We are unable to update anyone at the moment as it's now a police matter. Please keep an eye on our social channels for updates on this. -Thanks, A
I'm sure many of you are thinking the same thing I am right about now...
Right now they are "securing individual wallets" and continuing to give unsubstantial information about the incident. It is believed that around $16 Million has been stolen in this breach. The hacker(s) responsible performed a series of attacks on smaller individual wallets -over 76,000 in total- as opposed to the usual tactic of smashing and grabbing the whole payload in one transaction. This will probably help avoid detection for the participant parties and it will likely be a technique mimicked in the future. It can be implied that they likely gained access to thousands of private keys and used that to steal the assets, which were mainly Ethereum (ETH) and ERC20 tokens.
The police in New Zealand say the whole matter is extremely complex but they claim to be making decent progress with their investigation according to a report by the NZ Herald. They will also be working with many overseas authorities and experts in digital forensic for the investigation so it will certainly take a good bit of time to complete.
All memes aside, whether or not this ends up being an inside job -which I really hope isn't the case- this is pretty bad news for Cryptopia. Many users who are speaking out over the hack have expressed in no uncertain terms that they want their ability to withdraw, not deposit, turned back on. It could be quite difficult for them to recover if a momentous spur of withdraws go through once they finally open it back up.
As of their latest post it has been announced that original founders of Cryptopia will be rejoining the team. At least they are trying to prepare for the inevitable fallout.
If you happen to find yourself one of the unfortunate ones who have their funds locked up in this exchange, we at Crypto Traders TV would recommend you keep any serious funds in cold wallets when not actively trading them since you never really know when one of these smaller altcoin exchanges might go belly up.