What have happened to Poloniex?
Poloniex Hot Wallets Hacked With $114M Seemingly Stolen: On-Chain Data
Poloniex investor Justin Sun confirmed the exploit, saying the exchange will reimburse affected users and offering a "white hat bounty" to the hacker.
Cryptocurrency exchange Poloniex has had its hot wallets drained by hackers with an estimated loss of around $114 million, several sets of on-chain data show.
A suspected hack was flagged at around 10:55 UTC by blockchain security firms PeckShield and Cyvers. Poloniex announced 12 minutes later that the exchange's wallet had been disabled for maintenance. The hack was later confirmed by Poloniex investor Justin Sun in a tweet.
Various wallets across multiple blockchains appear to have been targeted. Arkham data shows that an Ethereum wallet, now tagged as "Poloniex hacker," sent a total of $114 million worth of tokens from Poloniex in 357 transactions. A wallet on the Tron blockchain also sent around $42 million to various wallets.
Poloniex is one of the longest-running crypto exchanges, having been founded in 2013. It was acquired by Circle in 2018 and later spun off to several investors including Justin Sun, who revealed that he was a part of the most recent acquisition in 2019.
The exchange has facilitated $616 million worth of trading volume over the past 24 hours, its public reserves are not available to view, according to CoinMarketCap. That compares with $19.3 billion for market leader Binance and $3 billion for Coinbase (COIN), the only publicly traded exchange.
Crypto exchanges are common targets for hackers. Two months ago HTX was hacked with a total of $8 million worth of ether (ETH) being drained; South Korean exchange Gdac lost $13 million in April and Deribit lost $28 million in a hot-wallet hack last November.
On-chain data also show the Poloniex hacker bought $20 million worth of tron (TRX), pushing the token's price up by more than 25%.
Blockchain analytics company Nansen reported that there were just 175 tokens left in Poloniex's wallet, worth a total of $10,000.
"We are currently investigating the Poloniex hack incident," Sun tweeted. "Poloniex maintains a healthy financial position and will fully reimburse the affected funds. Additionally, we are exploring opportunities for collaboration with other exchanges to facilitate the recovery of these funds."
Sun added that the exchange is offering a 5% white hat bounty to the hacker with a deadline of seven days before engaging with law enforcement.
Sun posted on X (formerly Twitter) later Friday that Poloniex "successfully identified and frozen a portion of the assets associated with the hacker's addresses."
"At present, the losses are within manageable limits, and Poloniex's operating revenue can cover these losses," he added.
UPDATE (Nov. 10, 12:20 UTC): Updates amount stolen in headline, first paragraph, according to Arkham; adds Justin Sun white hat bounty offer in last paragraph.
UPDATE (Nov. 10, 14:47 UTC): Adds details of Justin Sun's investment, Poloniex volume data and Nansen tweet.
UPDATE (Nov. 10, 16:18 UTC): Adds Justin Sun's post about Poloniex having identified and frozen a portion of the stolen assets.
UPDATE (Nov. 10, 14:47 UTC): Adds details of Justin Sun's investment, Poloniex volume data and Nansen tweet.
Announcement on Poloniex Hack Incident
"Dear Poloniex users,
Regarding the Poloniex hack incident, we hereby promise to each Poloniex user that Poloniex maintains a healthy financial position and will fully reimburse the affected funds.
The Poloniex team has successfully identified and frozen a portion of the assets associated with the hacker’s addresses to avoid further losses.At present, the losses are within manageable limits, and Poloniex’s operating revenue can cover these losses.
Additionally, the team have restored Poloniex’s systems, preserved relevant evidence, and in the coming days, we will work diligently to gradually resume deposits and withdrawals on Poloniex, ensuring 100% security. Apologize for any inconvenience this may have caused, thanks for your kind understanding and support!"
So what's your thoughts? Can we still trust Poloniex? For me Yes,
Remember, It's crucial to recognize that no exchange is completely risk-free. Users should diversify their holdings across different wallets and exchanges, use hardware wallets for long-term storage, and stay informed about best security practices in the cryptocurrency space.
If you have reservations about a specific exchange, including Poloniex, consider consulting with the crypto community, reading updated reviews, and keeping abreast of any recent incidents or changes. Always use exchanges responsibly, and don't leave significant amounts of cryptocurrency on platforms that you don't actively trade on.
