Kraken Crypto Exchage Hit ny 3M Theft Exploiting Zero-Day Flaw:
Crypto exchange Kraken revealed that an unnamed security researcher exploited an "extremely critical" zero-day flaw in its platform to steal $3 million in digital assets and refused to return them.
Details of the incident were shared by Kraken's Chief Security Officer, Nick Percoco, on X (formerly Twitter), stating it received a Bug Bounty program alert about a bug that "allowed them to artificially inflate their balance on our platform" without sharing any other details
The company said it identified a security issue within minutes of receiving the alert that essentially permitted an attacker to "initiate a deposit onto our platform and receive funds in their account without fully completing the deposit."
While Kraken emphasized that no client assets were at risk of the issue, it could have enabled a threat actor to print assets in their accounts. The problem was addressed within 47 minutes, it said.
It also said the flaw stemmed from a recent user interface change that allows customers to deposit funds and use them before they were cleared.
On top of that, further investigation unearthed the fact that three accounts, including one belonging to the supposed security researcher, had exploited the flaw within a few days of each other and siphon $3 million.
"This individual discovered the bug in our funding system, and leveraged it to credit their account with $4 in crypto," Percoco said. "This would have been sufficient to prove the flaw, file a bug bounty report with our team, and collect a very sizable reward under the terms of our program."
"Instead, the 'security researcher' disclosed this bug to two other individuals who they work with who fraudulently generated much larger sums. They ultimately withdrew nearly $3 million from their Kraken accounts. This was from Kraken's treasuries, not other client assets."
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