UK Crypto Exchange Faces Security Breach Leading to $22 Million Loss
• Lykke, a UK-based crypto exchange, halts trading due to unauthorized access.
• Web researcher SomaXBT suggests the exchange was hacked.
• Depositors are unable to withdraw funds, but Lykke assures customers that their funds are secure.
In a troubling development for the crypto industry, Lykke, a crypto exchange based in the UK, has suspended trading operations after experiencing a security breach on June 6. The exchange reported unauthorized access to its platform, prompting concerns about the safety of user funds.
According to SomaXBT, a web researcher who first brought attention to the incident, the exchange was targeted by hackers resulting in a loss of $22 million. Taylor Monahan, a MetaMask developer and crypto defense expert, confirmed the suspicious outflows from the platform.
Customers of Lykke are currently unable to withdraw their assets, with reports of emptied account balances indicating a potential hack. The majority of the stolen funds were in Bitcoin, with the remainder consisting of Ether, Litecoin, and Bitcoin Cash, as revealed by onchain data.
Further analysis of the Ether withdrawals showed a swift conversion to the DAI stablecoin issued by MakerDAO. The stolen Bitcoin was distributed among multiple wallets in an attempt to obfuscate the transaction trail and launder the funds, a common tactic employed by hackers.
Despite the security incident, Lykke CEO Richard Olsen reassured customers that their funds are safe, citing the exchange’s strong capital reserves. The platform remains inactive as investigations into the breach continue.
This latest hack adds to the growing trend of crypto thefts in 2024, with over $582 million lost to security breaches so far this year. Private key leakage has been identified as a leading cause of these hacks, highlighting the importance of robust security measures in the crypto industry.
With concerns mounting over the security of digital assets, industry experts emphasize the need for enhanced safety protocols to protect against future breaches.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.