How the CoinEx Hack Led to $70M Theft Through Compromised Private Keys

Investigating the North Korean Lazarus Group Hackers

CoinEx, a Hong Kong-based cryptocurrency exchange, has revealed that private keys were compromised which resulted in hackers stealing over $70 million worth of tokens. The exchange is now looking to open lines of communication to try and claw back the funds.

CoinEx representatives have detailed their continuing investigation to Cointelegraph, as they work to build and deploy a new wallet architecture to restore the impacted users and the platform’s functionality. Although the estimated amount stolen is $70 million, CoinEx has stated that this is only a small percentage of its total assets under management and affected users will be compensated for any lost funds.

The team is still investigating the identity of those responsible for the security breach, which a few blockchain security firms attribute to the North Korean Lazarus Group hackers.

CoinEx Hack

CoinEx reported that a private key for its hot wallets had been compromised, which led to the loss of funds. The exchange halted its withdrawal service to prevent further losses and patched the system vulnerabilities. It is expected that withdrawals will be resumed within seven working days.

Cointelegraph initially reported that CoinEx had noticed “anomalous withdrawals” from one of its hot wallets on Sept. 12, with 4,947 Ether (ETH) being the first token to be transferred. Subsequently, the hackers withdrew other tokens to the same address.

The estimated value of the stolen funds was initially $27 million, but it has since doubled.

North Korean Hackers Targeting Crypto Space

North Korean hackers have been active in the cryptocurrency space for several years and have been behind some of the most significant thefts in the industry. For example, the 2022 Axie Infinity Ronin Bridge hack resulted in over $650 million being stolen.

According to Chainalysis, a blockchain analytics firm, North Korean hackers have stolen around $340 million worth of cryptocurrency in 2023. This figure is expected to increase as attributions have been made to the CoinEx hack and a $41 million theft from the Stake cryptocurrency gambling platform on September 4th.

To commemorate this moment in history and show your support for independent journalism in the crypto space, you can collect this article as an NFT.