Bitfinex CTO Defends the Freezing of Millions of USDT in Wake of KuCoin Hack

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In Brief
  • Millions of Tether (USDT) have been frozen on the heels of the KuCoin exchange hack.

  • A trader questioned the centralized nature of USDT.

  • The Bitfinex CTO defended the move.

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Following the KuCoin hack, Tether has frozen 20 million USDT sitting on an Ethereum address and Bitfinex froze 13 million USDT on EOS, according to Bitfinex CTO Paolo Ardoino. Another 1 million USDT was frozen on Omni and 1 million USDT on Tron.



In an announcement posted on its website, KuCoin revealed that it is currently monitoring several addresses linked to the hack. It is also collaborating with several exchanges and projects to halt the movement of the stolen coins and recover them where possible.

KuCoin on Sept. 25 suffered a devastating hack,  losing an estimated $150 million from its hot wallet. Speaking on his Twitter account yesterday, Ardoino gave several updates regarding freezes of potentially stolen USDT on Omni, TRON and EOS chains, as the crypto ecosystem scrambles to contain the situation.

 

One trader pointed out that it was a slippery slope for Bitfinex to freeze the USDT, asking what is to prevent them from stopping there. The Bitfinex CTO was quick to defend the move, saying that Tether is a centralized stablecoin with obligations to “users, regulators and law enforcement.”

Source: Twitter
Source: Twitter

Cross-Platform Cooperation

In the meantime, KuCoin confirmed that it is working with other exchanges to track the stolen funds. These exchanges include Binance, Huobi, OKEx, Bybit, Upbit, Bibox, Gate, MXC, BitMax, BigONE, BKEX, BitZ, HBTC, Hoo, Crypto.com, Bingbon, Renrenbit, LBank, Max/Maicoin, CoinW, Bibo, and Bitrue. 

Speaking on a livestream on Sept. 26, KuCoin Global CEO Johnny Lyu stated that the following addresses are suspicious and are being monitored:

  • ETH: 0xeb31973e0febf3e3d7058234a5ebbae1ab4b8c23
  • BTC: 1NRsEQRg5EjmJHbPUX7YADVPcPzCQBkyU7
  • LTC: LQtFoidy5TmLrPP77MZzgMRffqPsmRfMXE
  • XRP: r3mZvvHVLPtRWAujzBsAoXqH11jhwQZvzY
  • BCHSV: 15mC7zKbLyErSKzGRHpy6gyqS7GyRpWjEi
  • XLM: GBM3PJWNB5VKNOFXCDTTNXPMUNBMYTLAAPYDIIKLHUGMKX7ZGN2FNGFU
  • USDT: 1NRsEQRg5EjmJHbPUX7YADVPcPzCQBkyU7
  • TRX: TB3j1gUXaLXXq2bstiSMfjQ9R7Yh9DdDgK

Velo Labs on Sept. 26 revealed that it will invalidate all VELO tokens moved to the suspicious addresses and replace all of them.

Reactions to the Hack

Despite the nature of the attack, which worked by compromising the exchange’s hot wallet private keys, KuCoin insists that user data is safe and insurance will cover any losses. At press time, it is unclear exactly how many users have been affected and to what extent. But anecdotal evidence from Reddit does not suggest that substantial user losses have been recorded yet.

In a screenshot posted on Twitter showing what appears to be KuCoin Senior Partner Alicia Kao speaking to users in a KuCoin Telegram Channel. She reassures them that their funds are safe and the exchange is investigating the hack.

In the meantime, TRON founder Justin Sun has also reacted to the developing situation, offering his sympathy to KuCoin and pledging to assist in recovering stolen funds.

BeinCrypto will bring more updates as the story develops.

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David is a journalist, writer and broadcaster whose work has appeared on CNN, The Africa Report, The New Yorker Magazine and The Washington Post. His work as a satirist on 'The Other News,' Nigeria's answer to The Daily Show has featured in the New Yorker Magazine and in the Netflix documentary 'Larry Charles' Dangerous World of Comedy.' In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He tweets at @DavidHundeyin

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