Cryptopia Becomes the First Cryptocurrency Exchange Hacked in 2019

On its social media accounts, Cryptopia has admitted that the breach was first identified on Jan 14, 2019, after which the exchange was placed in maintenance mode while the team assessed the extent of the breach. Once the team became aware of the hack, the relevant law enforcement agencies were contacted, including the New Zealand Police and ‘High Tech Crimes Unit.’ Both are working hand-in-hand with Cryptopia to identify the nature and source of the hack while investigating the ‘major crime.’  

pic.twitter.com/0ZwqFfwwHi

— Cryptopia Exchange (@Cryptopia_NZ) January 15, 2019

The hack comes just days after the exchange announced it would be supporting the upcoming Ethereum Constantinople hard fork. The exchange also announced that all ETH and ERC20 transfers would be paused between January 14 and 18, which may have forced the hacker into action sooner than expected.

Potential Magnitude

As a lesser-known exchange, Cryptopia has often come under fire for listing low-quality digital assets, many of which have been subject to pump and dump price manipulation. Since the vast majority of digital assets listed on the platform had relatively low trade volume, Cryptopia quickly became the target of signals groups and organized price manipulation.

https://t.co/G7w8PMCZjc

— Mark (@mark8114) January 15, 2019

According to Whale Experts, a total of 19,391 ether were transferred from the exchange just two days ago, worth close to $2.5 million. However, it is currently unknown whether this transaction relates to the breach, or simply a whale extracting his or her funds from the exchange. Other reports indicate that a total of 48 million ERC-20 tokens were extracted from the exchange hot wallet, with an approximate value of $1.2 million moved to an unknown wallet. As of yet, it unknown whether there is any validity to this claim. Since the hack, the website has been placed into unscheduled maintenance, preventing users from logging in or checking their wallet balances. According to the message posted on the site, the team is working hard to resume services as soon as possible.

And The Award Goes To…

[bctt tweet=”With this breach, Cryptopia wins the award for the first exchange to be hacked in 2019 and is the first major exchange hack in several months.” username=”beincrypto”] As you might expect, the crypto community at large are not surprised, with many people slating the exchange for its lax security and listing practices, while others argued that this is the expected result of using centralized exchanges — arguing that decentralized exchanges would not suffer such an attack. Among the voices of those affected, many are calling out the breach as an exit scam in disguise, indicating that the theft is actually the result of Cryptopia siphoning off the funds, rather than a breach by an external hacker. Until evidence is provided one way or the other, it is not possible to accurately point fingers just yet. As of writing, Cryptopia has not responded to the comments, and have been silent on social media since the announcement. What is your opinion on the breach? Did you have any funds on the exchange? Let us know your thoughts in the comments below!

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