KuCoin Attack Update: Hackers Use Uniswap to Dump OCEAN and Synthetix

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In Brief
  • The KuCoin hackers are now dumping large amounts of SNX and OCEAN tokens and exchanging them for ETH.

  • The hackers are using the decentralized Uniswap platform to unload their stolen tokens.

  • Both SNX and OCEAN prices dumped as a result of the news, but have bounced back slightly since.

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The KuCoin exchange hack has led to the attackers commencing a massive dump of several ERC-20 tokens now in their possession. The token dump is primarily taking place on the Uniswap decentralized exchange protocol, which theoretically makes it impossible to stop.



Blockchain researcher Larry Cermak has been following the transactions in a thread on his Twitter handle.

As shown in this Etherscan link, the hackers started off with OCEAN, transferring 200,000 tokens into a wallet before swapping them for ETH via Uniswap. In total, they unloaded 130,000 OCEAN in 13 batches of 10,000 tokens each.



KuCoin Hackers Dump OCEAN and SNX

Following an apparent loss of liquidity in the OCEAN/ETH trading pair, the hackers briefly paused the dumping, only to continue shortly after. These developments likely contributed to tanking the OCEAN/ETH pair by nearly 13% in just two hours:

OCEAN/ETH Chart by TradingView

Acting to protect its users, OCEAN Protocol announced that it had paused the OCEAN contract, making trades impossible. In doing so, the hackers were prevented from dumping more OCEAN tokens and tanking the price even further.

Shortly thereafter, the attackers moved on to dumping Synthetix tokens, of which they had over 578,000 in their possession. This had a similar effect on the SNX price, which fell from just under $5.50 to as low as $4.70 in just two hours:

SNX/USD Chart by TradingView

Just the Beginning

As Cermak pointed out, the hackers still have vast amounts of ERC-20 tokens in their possession which are all at risk of Uniswap dumps.

Apart from the expected negative effect on the prices of these assets, Cermak says that it also potentially raises the specter of regulatory attention on Uniswap, which is, in theory, completely decentralized and impervious to all non-consensus action.



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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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