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Lykke Exchange falls victim to a $22 million hack: trading and withdrawals suspended

In brief

  • Lykke, a UK-based crypto exchange, has halted withdrawals and trading after falling victim to an attack on June 4 that resulted in the loss of around $22 million in various cryptocurrencies.
  • The attack was first discovered by blockchain security researcher SomaXBT, who accused the Lykke team of trying to hide the breach.
  • Lykke has acknowledged the attack and stated that both Lykke UK and Lykke Corp AG were affected, and apologized for any inconvenience caused to customers and partners.
  • The exchange claims to have solid capital reserves and a diversified portfolio, assuring users that their funds are safe and will be recovered.
  • Lykke has hired a cybersecurity firm to block and recover the stolen assets and has launched a criminal investigation into the incident based on the attackers’ IP addresses discovered.

Lykke, a well-known cryptocurrency exchange based in the UK, suffered a major security breach that resulted in the loss of various digital assets worth around $22 million.

The incident occurred on June 4 and forced the exchange to suspend trading and stop withdrawals as a preventive measure, causing concern among its users and the entire crypto community.

The attack was first brought to light by blockchain security researcher SomaXBT, who accused the Lykke team of trying to cover up the vulnerability. In a social media post, SomaXBT claimed that the exchange lost $19.5 million worth of crypto assets but is still trying to hide that fact.

The researcher provided a screenshot of a Discord message allegedly from the Lykke team, which stated that the exchange was undergoing “unscheduled full system maintenance.”

As reports of the hack spread, Lykke users voiced their concerns on social media. Some complained that the exchange was not functioning properly and that there were rumors of a hack. Others reported that their account balances had been emptied, further fueling speculation about the severity of the security breach.

On June 10, Lykke finally confirmed the attack in a social media post, confirming that both Lykke UK and Lykke Corp AG were affected.

The exchange deeply apologized for the inconvenience and worry caused to its customers and partners and assured them that their funds were safe and would be recovered.

According to Lykke, the exchange has solid capital reserves and a diversified portfolio that allows it to absorb potential losses from the attack. The team stressed that customer funds are safe and that they are working diligently to resolve the issue.

In response to the hack, Lykke has taken several steps to limit the damage and recover the stolen assets. The exchange has hired a third-party cybersecurity firm to assist in blocking and recovering the stolen funds.

Lykke claims to have discovered the attackers’ IP addresses and is using them to initiate a criminal investigation into the incident.

The Lykke hack is the latest in a series of security breaches targeting centralized exchanges. In April, the Rain exchange was hacked and $14.1 million was stolen, although the company later stated that no customer funds were lost as it immediately plugged the hole with its own reserves.

The increasing frequency of such attacks underscores the ongoing security risks associated with centralized exchanges and the need for robust measures to protect user funds.

As the cryptocurrency industry continues to grow and mature, exchanges must prioritize implementing enhanced security protocols and regular audits to prevent such incidents.

The Lykke hack has also reignited the debate about the transparency and accountability of centralized exchanges.

Many in the crypto community are calling for greater regulation and the adoption of decentralized solutions to mitigate the risks associated with centralized platforms.