CoinStats app suspends operations following a security breach affecting 1,590 wallets: details here
In an unfortunate development, CoinStats, which runs one of the famous applications for managing cryptocurrency wallets, announced that it had temporarily suspended its application after it was exposed to a security breach that targeted 1,590 wallets, which represents about 1.3% of the total user wallets on the platform.
CoinStats confirmed that wallets connected to central trading platforms (CEX) were not affected by the incident, noting that it is also investigating fraudulent notifications received by some users of the iOS and Android systems.
Incident details:
The hack has caused great concern among users, especially those whose wallets were already affected.
One user on X who has been a long-time CoinStats supporter reports that funds in his own wallet were withdrawn about an hour and a half before the scam notifications started.
This wallet, which was created in 2022 and was not connected to any external applications, was among the wallets targeted by the attackers.
CoinStats advised users whose wallets were affected to transfer their funds immediately using the private keys they had previously exported, as the company provided a link to the list of affected wallets.
CoinStats noted that the list of affected wallets may see some updates as the investigation progresses, but it does not expect fundamental changes.
It is worth noting that users received a fraudulent notification promoting a prize of 14.2 Ethereum, asking them to log in to the “CoinStats AirScout” wallet.
This notification was leading users to the “Drainer” website, a scam website that was promoted via a push notification from “CoinStats” as well as via an official in-app notification.
CoinStats apologized for this inconvenience, and assured users that it is working to address the issue and will provide updates as soon as possible.
Reasons for hacking:
“CoinStats” has not yet revealed the exact reasons for the hack, but suspicions revolve around the possibility of storing private keys on the company’s servers or the presence of vulnerabilities in the process of generating wallets within the application.
The ability of attackers to access servers and send a malicious notification indicates that there may be security vulnerabilities in the wallet creation mechanism that the attackers exploited.
So far, there have been no confirmed reports of wallets or APIs linked to CoinStats being affected.
However, some users reported draining other wallets that were connected via DeFi features, but these cases have not been confirmed by CoinStats yet.
CoinStats quickly responded and closed access to the app hours after the incident, and the app remains down while investigations continue.
The company is expected to announce more details and updates about the resumption of service in the near future.
For our part at Bitcoin Arabs, we always recommend caution and that users of the crypto market should always remain vigilant in the face of any competitions or surprise prizes in the world of cryptocurrencies. We also recommend using hardware wallets to secure digital currencies.