Lykke halts trading after losing $22 million in security breach

In this post:

  • Lykke stopped trading following unauthorized access to the platform on June 4, which resulted in millions of dollars lost.
  • Users have failed to withdraw from their wallets, while others have no balances.
  • Private keys are a security risk and have contributed to the increase in cases of crypto theft.

A UK cryptocurrency exchange, Lykke, has suspended operations after losing $22 million in a suspected security incident. The exchange reportedly shut down trades after unauthorized access to its system occurred on June 4.

Also read: DeFi protocol founded by ‘Sifu’ hacked for $19.4 million

This comes on the back of an increase case of crypto hackers “exploiting” private keys on trading platforms. This has enabled them to clean the affected wallets of all their funds, a trend that has increased lately.

Users’ wallets wiped clean

Following the security breach, users have been unable to make withdrawals. Several users have also revealed their accounts were empty since the security incident. Last month alone, the exchange handled $2,5 million in cumulative volumes.

A crypto defense enthusiast and MetaMask developer, Taylor Monahan, revealed that the exchange lost $22 million in outflows.

According to DLNews, half of the money was in Bitcoin, while the remaining funds were a combination of Litecoin, Ether, and Bitcoin Cash, as per on-chain data.

Onchain data also shows Bitcoin split between several wallets, a technique that is common with fraudsters in trying to obscure transaction trails.

Lykke investigating the case

Additionally, Ether was withdrawn from the platform and was exchanged into the DAI stablecoin.

Lykke CEO Richard Olsen apologized to clients via email, assuring them that all was well and that their investments were secure. Oslen said:

“We are still investigating the causes of the security incident. […] In the meantime, you can rest assured that your funds are safe.”

In a post on the X platform, the company pou indicated that investigations are underway, and an external cybersecurity firm is working on “blocking and recovering the stolen assets.”

Also read: Ethical hackers launch initiative to tackle crypto theft

According to DLNews, Lykke is not the only crypto exchange hacked in the past fortnight. On May 31, DMM Bitcoin had $320 million wiped off its platform.

It is estimated that investors have lost $503 million in crypto theft during the first quarter of this year in onchain security breaches, according to blockchain auditor CertiK. Of this figure, $239 million was a result of private key compromises.

Cryptopolitan reporting by Enacy Mapakame

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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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