LCX reports nearly $8M in losses after hot wallet compromise

LCX reports nearly $8M in losses after hot wallet compromise

LCX, a cryptocurrency exchange based in Liechtenstein, has suffered a hack of nearly $8 million after reporting unauthorized access to one of its hot wallets on January 9.

Revealing the news on Twitter, the exchange said it has temporarily suspended deposits and withdrawals on its platform, along with taking measures to protect the other wallets and assets. Crypto assets, including Ether, USDC, SAND token, LINK, and others were stolen from the hot wallet and transferred to an Ether wallet.

PeckShield, a blockchain security firm, was the first to report the hack after it identified a strange-looking transfer of ERC-20 tokens from LCX to an unidentified Ethereum wallet. At the time, PeckShield estimated the losses to be around $6.8 million.

hot wallet compromised? @lcx https://t.co/uL5a7oCFfM— PeckShield Inc. (@peckshield) January 9, 2022

However, soon after LCX confirmed the news and said it detected over $7.94 worth of crypto assets stolen from one of its hot wallets at roughly 11:23 PM CET on January 9. The theft took place on January 8, between 11:23 PM and 11:37 PM CET.

According to the report, 3,437,783.23 USDC, 162.68 ETH, 761,236.94 EURe, 101,249.71 SAND Token, and others were stolen during the security breach. Meanwhile, LCX has paused deposits and withdrawals, started an internal evaluation, and informed its global and security partners.

Incident update: At 11:23 PM CET on Jan. 9th 2022, LCX’s Technology team detected unauthorized access of one crypto wallet. A total of approx. 7.94M USD of crypto assets were stolen. 0.7M USD have been frozen. All other LCX wallets are not impacted. https://t.co/lqH81w69OV— LCX (@lcx) January 9, 2022

“During this difficult period we greatly appreciate the support from our customers, other exchanges, security experts, and the broader crypto community. LCX will continue to do everything in its power to mitigate the impact from this incident and restore full service as soon as possible,” the security exchange said in the announcement.

Crypto hacking via hot wallet compromise has become a new trend amongst hackers as more and more crypto exchanges continue to report security breaches. In December 2021, Singapore-based crypto exchange AscendEx suspended deposits and withdrawals after confirming a large number of fraudulent transfers from the exchange’s hot wallet.

Estimated losses were around $78 million and AscendEX said it will provide 100% compensation to all affected users.

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