Crypto hacks continue as we enter 2022, with Peckshield recording losses of $6.8M in Ethereum-based tokens from Liechtenstein-based LCX AG.
LCX AG has suffered a security breach that has seen one of its hot wallets compromised. They made the announcement on Twitter and have assured customers that they have taken security measures to protect other wallets and assets. Deposits and withdrawals are currently suspended. Ethereum tokens such as ETH, USDC, EURe, the native LCX token, and others have been transferred to the hacker ETH wallet with the following address: 0x165402279f2c081c54b00f0e08812F3fd4560a05. The transfer occurred at approximately 10 pm UTC on Jan. 8, 2022. The losses, according to Peckshield, total $6.8M. Most of the losses incurred included $3.4M worth of USDC, $2.2M worth of LCX, $504K worth of ETH, $468K worth of SAND, $114K worth of QNK, $47.4K worth of LINK, $10.8K worth of ENJ, and $9.7K worth of MKR.
What is LCX AG?
Domiciled in Liechtenstein, LCX operates a regulated crypto exchange, a decentralized exchange aggregator, and a token sale platform. They also tweeted, “During this difficult period, we greatly appreciate the support from our customers, other exchanges, security experts, and the broader crypto community.”
Hacks Becoming All Too Frequent
Hot wallet hacks are becoming all too frequent. Recently, Bitmart lost $196M when two hot wallets were hacked on Dec. 5, 2021, resulting in the loss of ETH and BSC. Bitmart promised to return the funds, but affected customers are getting impatient.
AscendEX disabled deposits after $77M worth of ERC-20, BSC, and Polygon tokens were transferred out of its hot wallet on Dec. 11, 2021.
Japanese exchange Liquid Global confirmed a hack of their warm wallets in August 2021. They moved all assets into cold storage wallets and suspended deposits and withdrawals.
Hot wallets have the advantage of being easy to use because they are always online. They come in the form of web-based wallets, mobile wallets, and desktop wallets. Cold wallets are offline and often come in the form of a USB flash drive, otherwise known as a hardware wallet. Hardware wallets are immune to hacking.
The LCX token has been down 9.8% in the last 24 hours. It is “a long-term sustainable incentive mechanism to motivate various stakeholders to participate in the ecosystem.” The LCX token is issued by LCX AG in accordance with laws and regulations in Liechtenstein. According to assessments by legal firms, the LCX token can be classified as a utility token in the US, Singapore, and Liechtenstein law.
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