Crypto Exchange Cryptopia loses 16 Million in a Hack

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Previous reports had stated that the value of cryptocurrency was stolen in the Cryptopia exchange hack for around $2.5 million, but it has been known that the true value of assets that were stolen actually sums up to about a whopping $16 million. A blockchain analysis platform by the name Elementus, reported the same after analyzing the Ethereum blockchain using their query engine.

The $16 million figure is seen to be covering only ether and ERC-20 tokens, and this indicates that it may be a possibility that more funds have been compromised during the attack. Elementus went on to say that the hack has resulted in some uncomfortable analysis from a security viewpoint since the examination raised various questions. 

Elementus said that the attackers moved $16,002,108 worth Ethereum tokens during the course of five days and this included $3,570,124 worth of ether, $2,446,212 worth of Dentacoin and $1,148,144 worth of Centrality.

Cryptopia hack
Source: Elementus

After these funds were moved out of Cryptopia, the attackers set out to transfer these cryptos to exchanges in small pieces and hoped that the cash would total up to $882,632.

Cryptopia Hack
Source: Elementus

This hack has been concerning since it is not like other high profile exchange thefts which typically would arise from a vulnerability in the platform’s smart contract code that would further grant back door access to the hackers. This hack has directly attacked more than 76,000 wallets of users. What this means is that the attackers haven’t found a single weakness point in the platform’s smart contract, but have instead, found a way to obtain thousands of private user keys from Cryptopia.

Elementus added that this wasn’t like those typical hacks which usually simplify down to a race against time even for the most successful hackers. It looks like these attackers appeared calm and leisurely, and have methodically extract cryptocurrency funds during the course of five days whereas Cryptopia has basically done nothing to protect themselves even though they were aware of the breach just the day after it happened.

This pointed lack of action is very bad news fro Cryptopia and for the cryptocurrency world in general because it paints a couple of possible scenarios that do nothing to help the industry’s credibility. It can only mean one of two things – either Cryoptopia had lost access to all 76,000+ user wallets in what would be a catastrophic and unprecedented security breach leaving it unable to intervene, or the attack was carried out with inside knowledge.

Elementus said that more than $46,000 worth of Ethereum tokens had been held across more than 2,000 Ethereum wallets which have remained at risk after they had been deposited on the exchange post the hack by users who were unaware of the situation.

At this point in time, the New Zealand police have stated that the investigations regarding the hack have been “progressing well” and they have been looking to unravel the identity of these thieves as well as retrieve the stolen funds.

On Tuesday, a statement was released by the police which stated- “The assistance of the cryptocurrency community has been sought as the investigation has progressed. It has been a very complex investigation and has involved expert digital forensic investigators from New Zealand and from various overseas jurisdictions, as well as overseas authorities. Members of the investigation team have met the management staff of Cryptopia yesterday and today and have outlined the progress in the investigation.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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