Cryptocurrency exchange Poloniex fell victim to hackers who drained its hot wallet, resulting in an estimated loss of around $125 million, according to blockchain security firm PeckShield. Hot wallets refer to methods of storing cryptocurrency that maintain a connection to the internet, which are less secure than offline cold wallets.
The estimated loss of @Poloniex hack is ~$125m, mainly on three chains: $56m (ETH), $48m (TRX), $18m (BTC).
— PeckShield Inc. (@peckshield) November 10, 2023
The attack was carried out across three chains, with $56 million in outflows on Ethereum, $48 million on Tron and $18 million on Bitcoin.
The suspected breach was first detected by PeckShield and security firm Cyvers. Poloniex quickly disabled its wallet for maintenance and the tweet was soon confirmed through a tweet from Poloniex investor Justin Sun.
“We are currently investigating the Poloniex hack incident. Poloniex maintains a healthy financial position and will fully reimburse the affected funds. Additionally, we are exploring opportunities for collaboration with other exchanges to facilitate the recovery of these funds,” wrote Sun.
He then wrote that there was a 5% white hat bounty available for the hacker to return the funds within seven days or else law enforcement would be contacted.
We are offering a 5% white hat bounty to the Poloniex hacker. Please return the funds to the following ETH/TRX/BTC wallets. We will give you 7 days to consider this offer before we engage law enforcement.
ETH Wallet: 0x176F3DAb24a159341c0509bB36B833E7fdd0a132 TRX:…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) November 10, 2023
Founded in 2013, Poloniex was acquired by stablecoin issuer Circle in 2018 before being spun-off to an investor group that included Justin Sun.