LCX Exchange Hacked: Hot Wallet Compromise Leads to a Loss of $6.8M

Key Takeaways:

PeckShield Inc. informed people about LCX hot wallet compromised.
According to PeckShield Inc. the estimated loss is $6.8M in total.
According to LCX, they have taken security measures to protect other wallets and assets.

Lcx Exchange Hacked — LCX Exchange Hacked

This morning PeckShield Inc. informed people about LCX hot wallet compromised. According to PeckShield Inc. the estimated loss is $6.8M in total. After PeckShield Inc. LCX informed people that “We noticed a security incidence at our platform. We are currently investigating and will provide regular updates. User funds are safe. In the meantime deposits and withdrawals have been suspended”.

LCX shortly updated people about the incident in a thread. According to that thread, they were sorry to announce that one of their hot wallets had been compromised. They informed everyone that they have taken security measures to protect other wallets and assets. According to the LCX update, the Ethereum blockchain-based assets such as ETH, USDC, EURe, LCX and other assets have been moved to the Hacker ETH Wallet: 0x165402279F2C081C54B00f0E08812F3fd4560A05.

ℹ️ Service Notice: We noticed a security incidence at our platform. We are currently investigating and will provide regular updates. User funds are safe!

In the meantime deposits and withdrawals have been suspended.
— LCX (@lcx) January 9, 2022

Using the above hacker’s address, we traced down the funds to TornadoCash. The hacker still got over 7.2M LCX tokens in his wallet. But we believe the rest of the tokens were first converted into WETH and then into ETH as in the Transfer transactions of the stolen ENJ. Later, the hacked transferred the ETH TornadoCash making it harder to trace.

At the time of writing, LCX had not disclosed any plans to assist in the return of the stolen funds. However, the company has confirmed that it will take the necessary security measures to protect other wallets and assets.

Further, the platform confirmed that none of the user’s funds was compromised and only the exchange’s hardware wallet suffered a loss. Further, the exchange has asked the community to help them out in retrieving whatever funds they could.

“During this difficult period, we greatly appreciate the support from our customers, other exchanges, security experts, and the broader crypto community.”