May 22, 2024
Poloniex Ether Theft: $53M Vanishes, Never Returned to Exchange
Altcoins News

Poloniex Ether Theft: $53M Vanishes, Never Returned to Exchange

On November 10, 2023, the crypto exchange Poloniex was rocked by a massive unauthorized outflow from its wallets, resulting in the loss of over $100 million worth of Ether (ETH), valued at $2,906 each at the time. Despite the exchange’s efforts to identify the hacker and offer a $10 million bounty, the stolen funds never returned.

Source: PeckShield

Tornado Cash Protocol Used

Six months later, blockchain investigation firm PeckShield discovered that more than half of the stolen Ether had been funneled through Tornado Cash, a privacy protocol designed to anonymize assets. The hacker consolidated over 17,800 ETH from six different wallets into a single Tornado Cash address, amounting to approximately $53.3 million.

 Source: PeckShield

Poloniex’s Response and Future Plans

In response to the breach, Poloniex temporarily disabled the compromised wallet and resumed operations shortly after, allowing investors to deposit and withdraw crypto. The exchange also took steps to enhance security, appointing a top-tier security auditing firm to fortify fund security and prevent future hacks.

Poloniex’s owner, Justin Sun, pledged to fully reimburse affected users, expressing confidence in the exchange’s financial position and seeking collaborations with other exchanges to recover the lost funds. He stated, “Poloniex maintains a healthy financial position,” indicating a commitment to restoring trust and safeguarding users’ assets.

Conclusion

The Poloniex hack of November 2023 stands as a stark reminder of the vulnerabilities in the crypto space. Despite the exchange’s efforts, the stolen funds, totaling $53 million, remain elusive. However, Poloniex’s proactive measures to enhance security and Justin Sun’s commitment to reimbursement signify a dedication to resilience and user protection in the face of adversities.

Image by vecstock on Freepik

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