Security & Fraud

Digital Currency Exchange Suffers $2M Hack

Gatecoin, a Hong Kong-based digital currency exchange company, became the victim of a security breach that allowed hackers to get away with 250 bitcoin and 185,000 Etherium, roughly 15 percent of the firm’s crypto-asset deposits.

Unfortunately, for Gatecoin and its clients, the total loss of the stolen currency equals roughly $2 million.

The company confirmed the major hit last week, saying in a statement that the cyberattack is believed to be linked to a disruption of its service that came as a result of a server reboot.

“We have previously communicated the fact that most clients’ crypto-asset funds are stored in multi-signature cold wallets,” the statement continued.

“However, the malicious external party involved in this breach managed to alter our system so that ETH deposit transfers bypassed the multi-sig cold storage and went directly to the hot wallet during the breach period. This means that losses of ETH funds exceed the 5 percent limit that we imposed on our hot wallets.”

For now, Gatecoin said it is looking to attain additional funding in order to cover the losses caused by the breach and reimburse all customers who were impacted by stolen funds.

Until May 28, the company’s services will remain offline, but customers will still be able to access their account and withdraw remaining funds via a new bespoke platform.

“The Gatecoin team greatly appreciates the patience of all users and stakeholders while we work with Tehtri Security to confirm all of the details related to the breach and ensure that our systems can be moved to a new, clean, thoroughly tested and monitored infrastructure before services can resume,” the company’s CEO, Aurélien Menant, said.

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