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UK Crypto Exchange EXMO Pauses Withdrawals After Suspected Hack

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In Brief

  • EXMO has reported unexpected withdrawals from the exchange's hot wallets.
  • It is investigating the incident but stresses that all funds remain safe.
  • The exchange suffered a different security incident the last time BTC hit all-time highs in Dec. 2017.
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UK-based cryptocurrency exchange EXMO paused withdrawals on Monday morning. The company made the decision after detecting ‘suspicious’ withdrawal activity.

The suspected hack appears to have affected the exchange’s hot wallets. EXMO says crypto assets in its cold wallets remain safe.

Suspected Hack Forces EXMO to Pause Withdrawals

EXMO claims to have noticed large withdrawals from its hot wallets at around 02:27 UTC on Monday. The exchange platform revealed the breach via a post on its website.

EXMO further said that ‘large’ amounts of BTC, XRP, USDT, ETC, and ETH left the exchange’s hot wallets earlier on Dec. 21. The impacted hot wallets contained almost 5% of the platform’s total assets.

The company reiterated that all funds in cold wallets are safe. It added that if the security breach impacts any user, EXMO will cover their losses completely.

As part of the ongoing investigation into the potential hack, six wallet addresses (one for each of the impacted assets) have emerged. EXMO is calling on fellow exchange platforms and service operators to block any addresses connected to these wallets.

The exchange has reported the breach to the London Police. It has also conducted a full review of the security procedures in place.

For now, the company has suspended all withdrawals from its wallets. It also advised customers not to deposit to the exchange.

Speaking with BeInCrypto Russia, Maria Stankevich, the Business Development Director at EXMO, said that the company was currently investigating the security breach. She added that all assets in cold storage remained ‘safe.’

Not EXMO’s First Security Incident

Monday’s security breach isn’t the first time criminal elements have targeted the EXMO exchange. In late 2017, EXMO’s Head of Analytics & Trading, Pavel Lerner, was reportedly kidnapped in Ukraine.

Masked men apparently abducted Lerner near EXMO’s Kyiv offices around the time BTC hit its 2017 all-time high. He was missing for three days. After the kidnappers received a 102 BTC ransom payment (~$2 million at the time), he reappeared.

Observers speculated at the time that Lerner’s disappearance might have been part of an effort to defraud exchange users of their holdings. However, EXMO repeatedly claimed that Lerner had no access to user funds and there were no major disruptions to activity at the platform.

In 2019, Lerner gave his first interview to the media about the incident. Speaking with Russian publication Fork Log, he dismissed the notion that the Ukrainian security service (SBU) may have been involved.

Lerner later said he felt those behind his kidnapping were just ‘ordinary bandits.’ He added that the most likely motive was simply profit.

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A former professional gambler, Rick first found Bitcoin in 2013 whilst researching alternative payment methods to use at online casinos. After transitioning to writing full-time in 2016, he put a growing passion for Bitcoin to work for him. He has since written for a number of digital asset publications.