The Lykke crypto exchange has acknowledged a security breach that drained over $22 million in digital assets from its wallets on June 4. In a social media announcement on June 10, the exchange revealed that it had halted withdrawals as a precautionary measure, assuring users that their funds were safe and would be recovered.
The Attack and Response
According to the exchange, both Lykke UK and Lykke Corp AG were affected by the attack. Lykke stated that it had discovered the attacker’s IP addresses and hired a cybersecurity team to work on blocking and recovering the stolen assets.
“We deeply apologize for the inconvenience and concern this attack has caused all affected clients and partners,” the Lykke team said in their announcement.
The exchange also claimed that it has solid capital reserves and a diverse portfolio, which will allow it to weather any potential losses from the attack, ensuring the safety of client funds.
Unacknowledged Exploits and Centralized Exchanges
Blockchain security researchers have been actively uncovering unacknowledged exploits against centralized cryptocurrency exchanges. In April, on-chain sleuth ZachXBT announced that the Rain exchange had been hacked two weeks earlier for $14.1 million, which the exchange later acknowledged.
Lykke’s Background
Lykke is a centralized cryptocurrency exchange that was launched in 2015 and is based in Switzerland. It advertises itself as a “no-fee crypto exchange” and claims to have evolved from a “prominent forex broker.”
Conclusion
The Lykke cryptocurrency exchange’s acknowledgment of a $22 million hack and the subsequent halting of withdrawals highlights the ongoing security challenges faced by centralized exchanges. As the cryptocurrency industry continues to evolve, it is crucial for exchanges to prioritize the protection of user funds and to be transparent about any security breaches that may occur.
