Kucoin hacked

[exstasie]

Live stream from the CEO ended an hour ago: https://www.youtube.com/watch?v=nRzL0kdUnME

TL;DR hot wallets were hacked, cold wallets secure, the amounts in question are limited but they haven't officially published the amount stolen. The CEO Johnny Lyu says, "the affected amount in this accident is a small amount for Kucoin. We are going to take the loss."

Their last official update suggests the same thing: "Please rest assured that if any user fund is affected by this incident, it will be covered completely by KuCoin and our insurance fund."

https://www.kucoin.com/news/en-kucoin-security-incident-update

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

[Slow death]

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

It is sad that these kinds of things happen, but when they suspend withdrawals for a long period, something like more than 2 days, do they not consider that people may have emergencies that would lead them to need their money? because the impression I get when I read this kind of thing Is it seems to me that the owners of the exchanges think that people do not urgently need the money that is on the exchange, I understand that being hacked is a big problem, if they have an insurance fund and have not suffered many losses then why do they need to stay for days to resume withdrawals and deposits? someone explain this to me? does this measure serve to investigate something or are they hiding the truth and are looking for money to cover losses?

[exstasie]

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

It is sad that these kinds of things happen, but when they suspend withdrawals for a long period, something like more than 2 days, do they not consider that people may have emergencies that would lead them to need their money?

It's more important they plug any and all security holes, harden their risk assessment algorithms, and penetration test against future attacks. They probably don't even know exactly how the keys were compromised yet. Immediately opening withdrawals back up could lead to more losses.

Anyone remember how long it took Binance to open withdrawals up after they got hacked last year?

[mindrust]

"Not your keys, not your coins."

Kucoin wasn't the first exchange that was hacked and won't be the last.

I had 50 grins there I hope my beer money is safe. 

[OmegaStarScream]

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

Did you quote the CEO from the video? Because the blog article doesn't say anything about "next week" (unless it got edited?):

The deposit and withdrawal service will be suspended during the period. We will restore the service gradually after ensuring a safe state. We will keep you updated.

[Slow death]

It's more important they plug any and all security holes, harden their risk assessment algorithms, and penetration test against future attacks. They probably don't even know exactly how the keys were compromised yet. Immediately opening withdrawals back up could lead to more losses.

now I understand, but are these cases of hack not linked to the employees of the exchange itself? first they should investigate the employees of the exchanges whenever there are such cases

Anyone remember how long it took Binance to open withdrawals up after they got hacked last year?

it took more than 7 days

[Bitcoin577]

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

It is sad that these kinds of things happen, but when they suspend withdrawals for a long period, something like more than 2 days, do they not consider that people may have emergencies that would lead them to need their money?

It's more important they plug any and all security holes, harden their risk assessment algorithms, and penetration test against future attacks. They probably don't even know exactly how the keys were compromised yet. Immediately opening withdrawals back up could lead to more losses.

Anyone remember how long it took Binance to open withdrawals up after they got hacked last year?

They take not too much time for enabling deposits and withdrawal because they are one of biggest crypto exchange in world so they done this all very quickly https://www.coindesk.com/hacked-crypto-exchange-binance-to-resume-deposits-and-withdrawals-on-tuesday

[exstasie]

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

Did you quote the CEO from the video? Because the blog article doesn't say anything about "next week" (unless it got edited?)

The quote is from the live stream, yes. He is speaking in Chinese, with a translator off camera going sentence by sentence in English. Not sure about the quality of the translations. I just included a few of what seemed like important answers.

Edit: They summarized the live stream. https://www.kucoin.com/news/en-kucoin-ceo-livestream-recap-latest-updates-about-security-incident

Q5: When will the deposit and withdrawal functions be available again?

Johnny: Per our current estimation, within a week. We will be gradually enabling the withdrawal service.

Q6: Is KuCoin’s insurance fund enough to cover the losses?

Johnny: Yes, it’s enough. Starting from early 2018, we have established the insurance fund to deal with unexpected security issues such as this.

Anyone remember how long it took Binance to open withdrawals up after they got hacked last year?

it took more than 7 days

That sounds right. Better safe than sorry.

I just hope they aren't using this to buy time before coming clean about an inability to cover withdrawals. Anyone know if there is public data available on the size of their insurance fund?

[Jawhead999]

I just hope they aren't using this to buy time before coming clean about an inability to cover withdrawals. Anyone know if there is public data available on the size of their insurance fund?

It seems they only show the insurance fund for futures trading only https://futures.kucoin.com/contract/history-fund it's around $300,000. I think they have other funds for this kind issues.

[exstasie]

Good news: Bitfinex and Tether were able to freeze ~$33M in USDT associated with the hack. That's something like 20-25% of the alleged token losses right off the bat.

https://twitter.com/paoloardoino/status/1309771801581494272

I just hope they aren't using this to buy time before coming clean about an inability to cover withdrawals. Anyone know if there is public data available on the size of their insurance fund?

It seems they only show the insurance fund for futures trading only https://futures.kucoin.com/contract/history-fund it's around $300,000. I think they have other funds for this kind issues.

That's just the futures insurance fund to cover liquidations during high volatility.

In their live stream, the CEO said they've been building this insurance fund since early 2018. Kumex (now Kucoin Futures) didn't even exist back then.

[BitcoinGirl.Club]

I woke up in the morning and saw this news then I was like DAMN! It's very risky to deal with exchanges. There are countless hacks so far and this is not a very good thing. May be someday we will have decentralized exchanges where we can trade our coins including bitcoin in a common chain.

Their last official update suggests the same thing: "Please rest assured that if any user fund is affected by this incident, it will be covered completely by KuCoin and our insurance fund."

That's good to know. Hopefully people do not get effected much. Binance did it twice if I am not wrong.

[friends1980]

"Not your keys, not your coins."

Kucoin wasn't the first exchange that was hacked and won't be the last.

I had 50 grins there I hope my beer money is safe.  

I fully agree that you can't warn people enough about the risks of leaving money on external wallets. But if KuCoin posts that everyone is covered by its insurance, then what is the relevance of posting "not your keys blahblah"?

We've had this discussion many times before. But as an exchange user, you have to absolutely make sure you're on a trustworthy exchange.

Don't just post "not your keys etc" because it sounds good and it makes people panic, but at least explain why to them or they will never understand.

[hugeblack]

The problem is not about hacking, but rather a leak of data, as I read in one of the articles^[1] that the private keys, which means that even after shutting down the server, the hacker was able to transfer some coins, the leakage of the private key is a dangerous and mean that hackers has access to more sensitive data.

It seems that the people inside the platform are sophisticated, the hackers are usually quick and they transfer money into BTC quickly and not keep USDT.

[1] https://coinfomania.com/kucoin-hacked-with-large-btc-erc-20-tokens-gone/

[noormcs5]

Live stream from the CEO ended an hour ago: https://www.youtube.com/watch?v=nRzL0kdUnME

TL;DR hot wallets were hacked, cold wallets secure, the amounts in question are limited but they haven't officially published the amount stolen. The CEO Johnny Lyu says, "the affected amount in this accident is a small amount for Kucoin. We are going to take the loss."

Their last official update suggests the same thing: "Please rest assured that if any user fund is affected by this incident, it will be covered completely by KuCoin and our insurance fund."

https://www.kucoin.com/news/en-kucoin-security-incident-update

Deposits and withdrawals are still suspended. "We are going to gradually open withdrawals in the next week."

The good thing is that people money is safe in this incident as the exchange has their insurance fund, from which they will pay the loss of the customers. I remember last time when binance exchange was hacked, they also did not let their customer experience the loss, because they maintain an insurance fund for this kind of unforeseen incidents.

[mindrust]

Don't just post "not your keys etc" because it sounds good and it makes people panic, but at least explain why to them or they will never understand.

There is nothing wrong with that sentence. It is the truth.

If you don't have your private keys, those coins don't belong to you anymore. Somebody else owns your coins. What you really own is, a promise.

A promise of having coins.

You should panic too if you hold too many coins on an exchange, that's good for your health.

Here is a recent real life example from me:

That shit exchange refuses me to withdraw my money even after I passed their verification process. Now they want a face verification and I got the feeling somehow they won't stop there.

I was using it anonymously before but randomly they said that I triggered their security systems because something abnormal has happened which is bullshit because after I did a small research, I learned it is happening arbitrarily to many people which makes me think,

Binance is either fucking insolvent or they are just assholes.

The amount I tried to withdraw was 5 bucks.

edit: problem got solved. I still hated it that I had to verify myself to move my funds out.

[FIFA worldcup]

It's more important they plug any and all security holes, harden their risk assessment algorithms, and penetration test against future attacks. They probably don't even know exactly how the keys were compromised yet. Immediately opening withdrawals back up could lead to more losses.

now I understand, but are these cases of hack not linked to the employees of the exchange itself? first they should investigate the employees of the exchanges whenever there are such cases

Anyone remember how long it took Binance to open withdrawals up after they got hacked last year?

it took more than 7 days

So you think that his kucoin hack is an inside act by the employees of kucoin or even the kucoin management is also involved in this hack drama ?
If this is true, i never understand the motive behind this act because the site will gain nothing from this as they promised to use insurance fund to cover the loses.

[joniboini]

So you think that his kucoin hack is an inside act by the employees of kucoin or even the kucoin management is also involved in this hack drama ?
If this is true, i never understand the motive behind this act because the site will gain nothing from this as they promised to use insurance fund to cover the loses.

There are some rumours floating around and the insider job thing is one of them. Keep in mind this is just some rumours and not facts. And if this is true, then it is for personal benefits obviously, not to drag Kucoin's image or something like that. Other possibilities are some hackers managed to send their malware to one of Kucoin employees, install a keylogger, or something like that and he got the seed/key of the hot wallet.

I think a third-party investigation or police investigation is necessary.

[figmentofmyass]

according to the "suspicious" addresses published by kucoin, the total losses are in the realm of $193 million! https://decrypt.co/43036/kucoin-hack-closer-to-200-million-as-team-releases-more-suspicious-addresses

granted, tether has managed to freeze most/all of the USDT ($36 million?) and some of the ERC-20 token issuers will be blacklisting and reissuing tokens to nullify the hack. but that's a big chunk of change!

There are some rumours floating around and the insider job thing is one of them. Keep in mind this is just some rumours and not facts.

literally every time an exchange gets hacked, people say it's an inside job and exit scam.

it's impossible to know the truth this early on, but immediately doing a video AMA and promising to reimburse all losses is a good start. that's not usually the way an exit scam starts.

[NeuroticFish]

it will be covered completely by KuCoin and our insurance fund

I'm glad that we finally reached the point at least the bigger exchanges have the tools to cover the loss of this kind of incidents.
Now let's see what will be the path of these funds...

literally every time an exchange gets hacked, people say it's an inside job and exit scam.

Exactly. But if they will pay up from their own pockets or insurance funds to cover the loses, it's not worth it. If they use insurance funds then in the future the insurance fees will be significantly bigger.

[stomachgrowls]

So you think that his kucoin hack is an inside act by the employees of kucoin or even the kucoin management is also involved in this hack drama ?
If this is true, i never understand the motive behind this act because the site will gain nothing from this as they promised to use insurance fund to cover the loses.

There are some rumours floating around and the insider job thing is one of them. Keep in mind this is just some rumours and not facts. And if this is true, then it is for personal benefits obviously, not to drag Kucoin's image or something like that. Other possibilities are some hackers managed to send their malware to one of Kucoin employees, install a keylogger, or something like that and he got the seed/key of the hot wallet.

I think a third-party investigation or police investigation is necessary.

Cant really blame if people would really have that kind of perception anytime an exchange had been hacked.Its neither an inside job or truly an external attack and as mentioned above, knowing the truth is impossible.

This is the hardest part when you do really store up some coins on an exchange where you wouldnt know on when a hacked would happen.There are already a few top exchangers had already had the same incident
but people are still confidently storing up their coins in spite of that and when hack do occurs then thats the time they do really regret out.

Good thing that they do consider out on paying up those losses from their own pockets which is a good thing. Total losses of 200M on this incident cant be considered small as they had proclaimed but rather this one will really put up some serious marks into their own pockets but they dont have any options but to compensate on whats had been lost rather than risking out the entire business reputation.