In a major upset to the crypto world, the British exchange Lykke slammed on the brakes, halting all trading services. The reason? A potential hack that resulted in a staggering loss of $22 million. This isn’t just a major setback for Lykke – it raises serious questions about the security of our digital assets. But how did this happen? And what does it mean for the future of cryptocurrency?
Read on to find out.
Red Alert! There’s Been a Breach…
Lykke reported the case of “unauthorized access” to the platform when web investigator SomaXBT conducted the related investigation. This hack caused considerable exits of several digital assets such as Bitcoin, Ether, Litecoin, and Bitcoin Cash given by on-chain data.
Taylor Monahan, a MetaMask developer and crypto defence analyst, was one of the early persons who pointed out the unusual transactions.
In response to the growing threat, Lykke swiftly suspended all trading activities to prevent further losses. To complicate matters, the stolen Ether was quickly converted into DAI, a cryptocurrency commonly used by hackers to cover their tracks.
Reassuring the Masses
Richard Olsen, Lykke’s CEO, moved quickly to reassure users, emphasizing the security of client funds despite reports of depleted account balances. Olsen reassured,
“Your money is protected because Lykke is a diversified company with adequate cash”.
Lykke confirmed the attack via a tweet, acknowledging that both Lykke UK and Lykke Corp AG were targeted on June 4th. The exchange promptly initiated containment measures, halting several systems to prevent further damage, alongside a thorough review and remediation of security flaws. Internally, efforts are underway to identify the perpetrators, with law enforcement agencies launching a criminal investigation into the breach.
On the same note, to support their action, Lykke has hired an external cybersecurity firm to help them prevent the theft as well as recover the lost assets.
“Despite the fact that Lykke has adequate reserve capital and diverse investment products, it has a good financial security and the client’s money is safe and can be clawed back. ”
The abrupt trading halt has sent shockwaves throughout the cryptocurrency ecosystem, underscoring the inherent vulnerabilities facing market participants. While Lykke diligently works to resolve the situation, the exchange remains temporarily closed, a precautionary measure aimed at containing the fallout and restoring stability to the platform.
Also Read : How Hackers Are Exploiting High Profile Accounts: A Look Into a Recent Supply Chain Email Breach
Can Lykke regain user trust? Tell us what you think.
