On Friday, KuCoin, a cryptocurrency exchange, suffered what the crypto world considers among the most massive hacks. So far, KuCoin disclosed “suspicious addresses” that the hackers were sending around $10.7 million worth of bitcoin. In all suspicious addresses, the total amount of loss in the hack totals to $203 million. Nonetheless, actual damage may be higher if KuCoin shares additional lessons.
Crypto Hackers Swap Tokens on Uniswap
Researchers at The Block reported today, the 27th, that hackers have begun selling the stolen crypto. They are swapping small-cap cryptocurrency to Ethereum through Uniswap. In less than an hour, the hacker brought the price down by 4%. Hackers have never laundered their money on Uniswap before, making this the first time.
For small-cap stocks, there is growing concern about selling pressure due to volume and market capitalization. The hackers have taken advantage of decentralized exchanges with increased trading volume and the mechanism without KYC.
Combined Effort to Bring Attackers Down
Cryptocurrency exchanges and blockchain projects froze some of the stolen assets to minimize the damage; they have done a thorough job.
Frozen USDT includes USDT worth $19 million issued on Ethereum and USDT worth $12 million issued on EOS. Even with no specific freeze method mentioned, the USDT system, which is centrally published, may have been used to freeze the relevant USDT.
Orion Protocol has updated its smart contract whereby $8.5 million stolen tokens have been rendered obsolete. Covesting has frozen the $520,000 stolen, and KardiaChain has invalidated $9 million worth of crypto from the hackers.
Velo Labs announced that it would invalidate all 122 million VELO tokens stolen in the hack, worth about $76 million. VIDT Datalink will freeze 14 million VIDT, worth about $6.4 million. SilentNotary will replace all of its tokens, including the $94,692 affected. Ocean Protocol paused its smart contract after $8.6 million was lost.
By now, most crypto projects have either been frozen or rendered obsolete. Others have the intention of doing so. Kucoin has disclosed that about $130 million of stolen funds, about 65% of the hackers’ haul, has been frozen. Selling those funds on secondary markets is now tricky, and ruining smaller tokens’ fragile economies is hard for the hackers.
Despite all of this, KuCoin is still out of the pocket of at least $200 million. However, it has confirmed that its insurance fund is large enough to cover all of its users. It estimates that withdrawals and deposits will be back to normal within a week.