Bitcoin Forum

A Japanese exchange, Liquid has been hacked, over 80 million US dollars worth of crypto assets were stolen from warm wallet (which I believe it means hot wallet) after the exchange was compromised on Thursday, it is reported that the remaining crypto assets has been transferred to a cold wallet.



Crypto exchanges are often hacked, some people make use of crypto exchanges for holding which is wrong, why not move the crypto assets on exchanges into you decentralized (noncustododial) wallet, have your seed phrase or private key and have full control over your crypto assets and protect it from hackers, the main focus of hackers are exchanges because they are holding huge amount of customer's crypto assets online which give hackers the hope of hacking exchanges which are successfully hacked at times.

Also, another issue is data breaches, data of the customers that make use of exchanges can leak to hackers, hackers will be able to know a lot in details about the customers which can later be used to impersonate some of the customers.

If you are not trading, I see no reason why using exchanges, and if you have inactive funds on exchanges, better move it to your noncustododial wallet and protect your seed phrase and private perfectly and absolutely.

I wonder how much funds the cold wallets were holding and if any effects will be passed on to users of the exchange or if the exchange can afford such a hack.

It'd be weird if exchanges did store kyc data online, realistically those should be stored offline for reference once the verification steps are complete.

The hacker(s) seemed to do quite a few transactions to get all of the funds though which seems quite strange, perhaps the exchange thought it had better security than it did by trying to diversify their wallets a bit?

It's sad to hear this. Liquid once was a Japanese unicorn. I had strong belief that Liquid could compete again Binance and waited for 2-3 years to see that but it couldn't. Liquid's service was pleasant anyway. My account had an issue with 2FA when I moved to a new phone but its Help Center resolved within a few minutes. Luckily I have moved all of my assets. This might me the end for Liquid.

You could say that their funds got... liquidated.


I'll see myself out.

Maybe it's the same hacker who recently hacked and then returned $600 million in crypto?

I wonder what happened to Japanese discipline and precision when things like this happen to them, and where is their common sense if they keep so much crypto in a hot wallet? Fortunately, who else uses Japanese exchanges (besides the Japanese), after Mt.Gox hacking, which has not yet been legally resolved after so many years...

you sir have the type of humor I appreciate. Well done!

These types of breaches are a constant looming threat, but unfortunately, we still use exchanges and keep our assets on them because fast trading tends to be easier, and in crypto being fast meant the difference between winning or losing. News like this suck because it hits close to home, it can happen anytime to anyone.

To be fair, assuming CoinMarketCap data is accurate, their trading volume on bitcoin alone is $70 million. I'm not 100% sure on how exchange wallet structure's work, but I'd assume they have $80 million worth of crypto in their hot wallets as so they can process user withdrawals quickly.

https://coinmarketcap.com/exchanges/liquid/

$80 million is pretty small compare to previous hacked exchanges that exceeds hundred of millions of dollars. If liquid is one of the top exchanges in japan then its good to assume that they can handle the loss with the work of their insurance funds.

Here we go again, is this ever going to end? Are there no permanent fix to all this crypto exchange hacks? It's been like forever and no better solution all along, sigh, this is why it's bad leaving funds on exchanges anything can just happen and day

Again exchange hacked! Liquid exchange hacked few days later the incident of poly network hacking. Is the crypto market going to be occupied by hackers? I am very embarrassed by such incidents. The security of exchanges should be made stronger.

At least the hacker was kind enough to return most of the funds. In fact, Poly decided to hire him.

No and no. Not unless they invest a lot on the security of the platform just like what top exchanges did (Binance, OKEx)

As long as there is no huge adoption for DEX and people keep using CEX, then hack incidents is inevitable

This goes to prove to users with the mentality that, exchanges are relatively safe for there holdings that, you never know when the hacker would strike. If you did know, then there would be no point because, users of the exchange must have moved them coins safely to a wallet.

Moving coins from exchanges to wallets is always a had choice for traders for sure as, most traders aside from looking to trade them coins to make the most of it, exchanges seems the only place where you could retain your coins value in stable coin during the bear market.bone thing that should be of note when thinking in these parts is that, its better to have your asset devaluate than loosing it all becuase, cryptos as it is, would always appreciate much later.

I'm afraid, there is no problem with the network, the problem is inherent in users of the network and more often than not, a successful scam stems from the actions of people who do not know how to properly be their own bank. I mean it's basically easy for people to understand that their funds should not be stored in an exchange wallet, they also should know that they have to be in control of their private keys and if centralized exchanges have it, then it's "not their funds", all these are the basics that crypto users have to know, if one fails to and gets scammed, then it's on them and not the network.

We can talk about the security of centralized exchanges all we want, but in truth, you're meant to be your own security as far as dex crypto is concerned, you should take up that responsibility all to yourself, if you pass it over to centralized services, then do not complain when they fail to properly do 'your' job for you.

Well sad to know --there is no safe thing over the internet, there could be a chance that you will get hacked because those hackers now are being smart when it comes to hacking and they are willing to spend their small amount to set up another clickbait. As we saw now, how many of them this year that crypto market was scammed, this means that this always reminds us that exchange is not a wallet, don't store your crypto asset under on exchange wallet since it is very easy to compromise.

Damn, looking at that btc and eth address, that's really a lot.

This goes for both type of exchanges, dex and cex. People who have been confidently leaving their funds on exchanges, they should start to scatter their funds or just safely put that into cold storage of their own.

One thing that always surprise me is that exchanges make use of hot wallet more often, the reason is for fast processing of transactions. I have been reading news about exchanges that were hacked, I have never read that hackers was able to get through a cold wallet of an exchange, they were all using hot wallet, and the reason for the frequent hack, and the comment I have read all the time about exchanges making use of hot wallet is because of the transaction processing time (time to broadcast the transaction not to be delayed), but it would have been safer if exchanges are deploying means they can directly connect to cold wallet rather than depending on hot wallet, hot wallet has been their usual means.

Figures vary according to sources, however, apparently, it is more than $80 million. Various sources claim it is $97 million. That's huge. And even if Liquid is a considerably large exchange that has been operating for several years, this is still a heavy blow to them. This might be the beginning of the end for this exchange.

Oftentimes, exchange hacks, especially those involving new and unknown exchanges, don't matter much to me. But if hacks involve large exchanges with years of more or less good track record, it seems it is also a blow to cryptocurrency in general.

This serves as another reminder that centralized exchanges are ticking bombs.

$70 million trading volume doesn't mean they own $70 million worth of cryptocurrencies because volume is very different from balance. For example when you deposit $1000 and buy $1000 worth of some shitcoin then dump it later on at lets say $1200 the exchange trading volume becomes $2200 but the balance of cryptocurrency there is still $1200. Now imagine how many trades each day trader makes every day and you'll see that the total balance is far below the total volume.
On top of that the exchanges usually report fake volumes too because they don't pay any taxes so they can easily lie without cost.

It is not a blow to cryptocurrencies, or to be more specific, it is not a blow to decentralized cryptocurrencies like bitcoin. Irrespective of an exchange being old or new, there is no guarantee or 100% assurance that it can not be hacked, the exchanges are making use of online wallets, online wallets is not safe from hack, it can be hacked, that is why we can not have in mind that exchanges are safe, thinking it can not be hacked. Best is to just move our funds from the exchanges into cold or segwit noncustododial wallet or both combined which guarantee safety.

Does anybody know whether it was an inside job or not? In these times exchanges either get hacked because the owner fled with the money or an employee became rogue.

Exchange hacking has become pretty common nowadays, still exchanges are not upgrading their security level and innocent users lose their money. This is why no one should use an exchange wallet for holding funds, it is better to always keep funds in a personal non-custodial wallet.

I won't be surprised if this turns out to be the case, the sector lack of moderation (which is a good thing) is been misuse by those would we think are to be the forerunner of the industry. In the past those we entrusted our funds with has ran away with them which make me wonder why the exchange are still getting massive patronage in regards to storing of coins in the exchange. The truth is simple, people don't trust themselves to keep their assets safe which is why they turn to this institutes to help them out but not knowing those are not the perfect choice.

No exchange is safe be it centralized or decentralized, they can all be exploited same as most wallets out there that aren't decentralized (non custodial). So while the advise of storing your funds in personal wallet are ideal, it should be noted that not all wallets out there are considered safe. The centralized wallet providers just like the exchanges are coming out with impressive ads of convincing you to keep your coins with them but don't be deceived.

No amount of staking rewards should tempt you to keeping your funds with them. Centralized wallet are just as worst as exchanges neither should be trusted. Wallets like electrum why can be easily setup are perfect if you can't get your hands on hardware wallets.

Another day, Another exchange got Hacked. A total of approximately 91.35mm  USD was moved from Liquid exchange by an unauthorized party!!
Here is the latest Liquid warm wallet incident report: https://blog.liquid.com/warm-wallet-incident
16.13m USD already frozen.

I strongly believe it's an internal job, nothing else. Only, for this reason, I use 5+ exchanges.
No one knows when which one exchange will be hacked next. So it's a good practice to use some other exchange for your trade. Dont put your money at only one exchange. You can also be hacked like this.

Keeping your funds in exchange is risky no matter you keep all in one or in multiple exchanges because once its lost then its lost forever. Maybe our loss amount csn be reduced when we use multiple exchange but its always better to keep the funds in a wallet which gives you complete control over your assets.

Yes, electrum wallet is very easy to setup, I am always surprised with articles I see online that it is for experienced bitcoin users. Even if someone has unused computer or android phone, the person can even still use it as an airgapped device and install only Electrum wallet on it and use it as cold storage while its pubkey can be imported on another device which will be the watch-only device for transaction tracking and for initiating transaction which will be transferred to the cold wallet for signing either through the USB stick or QR code. But the other reason why hardware wallet is also preferable is because it support many altcoins.

The best is to just do not even make use of an exchange, make use of noncustododial wallet like Electrum for Bitcoin, and hardware wallet for Bitcoin and many other cryptocurrencies. You will have your seed phrase, you will have your private key, you will have complete control over your coins, you will also have privacy. Exchanges are for traders while any inactive funds on it are best safe on noncustododial wallet and should be moved to noncustododial wallet, most especially the cold wallets which are one of the safest wallets.

Good advice @op, really a good advice, newbies should take this seriously, as long as you are not trading at that moment, it's bettter to withdraw your money off the exchanges and keep in a wallet that you are totally in control of, most especially, the smaller exchanges, those that have a higher chance of being hacked.
But all the same, wanna take this moment to say sorry to those who lost money in the hack, I pray you guys will make it back in multiple folds... Amen.
Never ever for any reason use an exchange wallet as a your private wallet, nothing in crypto is more riskier than this.

I don't understand why people keep large amounts of coins in their exchange wallets. Exchanges get hacked all the time, and the coins may disappear forever. People need to learn to use the tools they have at their disposal.

It's amazing how many people in the crypto community don't even own a "hardware" wallet. That means they have nothing in their hands, and the entire value of their coins is put in the hands of exchanges. What a great use of money.

It's an exchange it's supposed to be that way and know that there are lots of people using the exchange that's it has a lot of funds in there. Although, the recent hack doesn't actually affect the market and I wonder why because oftentimes in the past when this happens the fud and dumping gets serious. You would think to likely dump your Bitcoin as well but I guess people nowadays learned the hard way to just hodl instead of dumping because of how much valuable Bitcoin today compared to the past.

Anyway, it's not necessary for everyone to own a hardware wallet if they could use a free wallet such as Electrum which is better and not everyone do own large amount of Bitcoin that's why there's no need for owning a hardware wallet.

One of the most important lessons in the crypto world is to save your funds in a non-custodial wallet, keep the private key, and don't let others know. This is an absolute way to keep your funds safe. I learn this back in 2017 when I first time enters the crypto world. It happened with Bitgrail, an exchanger that supports Raiblocks (NANO) from the beginning. I don't know whether it's really a hack or exchanger's trial to scam cause it happened when Raiblocks was at its peak. It was a big scandal back then. However, since then I never keep big funds on exchangers, only my assets that were ready to trade at that time.

In my opinion, Liquid is not that big exchange that a hack would affect the market. The market is probably too big for this kind of influence. And besides, if I understood correctly, the funds were stolen from Ethereum wallets, so there is no reason for this hack to affect the Bitcoin price.

If you want to do trade with your crypto asset, You need an exchange for this. Is there any alternative you know? I like to hold my coin in my personal wallet, but when I like to do trade with my cryptocurrencies, I use the exchange. For hacking issues, I like to use a few exchanges,s not one.

You know what, Binance already announced SAFU, To know more  https://academy.binance.com/en/glossary/secure-asset-fund-for-users So it's the safest exchange that I believe.



Without exchange, you cant able sell/trade your coin. So we need to use an exchange, and there is no alternative that I believe. For hold Bitcoin/altcoin hardware are best, but for trading, you need to use an exchange. If you use a few exchanges, your loss will be minimized if there are any hacks occurs. Trust me

Very often recently, exchanges have started to be hacked, of course I do not know this exchange, I have never traded there, but I think that the exchange needs to conduct its own investigation, perhaps they will learn a lot of new things.