Crypto.com User Accounts Breached by Hackers, ETH Worth $15 Million Stolen From Exchange

Crypto.com CEO Kris Marszalek has indicated that the firm will take this financial blow and reimburse users who may have lost funds.

By Radhika Parashar | Updated: 20 January 2022 12:45 IST

Crypto.com User Accounts Breached by Hackers, ETH Worth $15 Million Stolen From Exchange

Photo Credit: Reuters

Crypto.com's hack was reported just days after it announced the expansion of its investment arm

Highlights

The downtime of withdrawal infra was 14 hours
Stolen tokens being “washed” via Tornado Cash
The exchange had halted all withdrawal transactions post attack

Crypto.com, an international exchange which rose to prominence thanks to its deals with famous sports teams, was recently attacked by hackers. While the accounts of hundreds of Crypto.com users were compromised, the security breach also cost the company $15 million (roughly Rs. 110 crore) in Ether tokens that have been stolen. Crypto.com CEO Kris Marszalek confirmed the attack while claiming that “no customer funds were lost” in this hack attack. In a Twitter thread, Marszalek has shared a summary of how events transpired.

“The downtime of withdrawal infra was 14 hours. Our team has hardened the infrastructure in response to the incident,” Marszalek tweeted.

Some thoughts from me on the last 24 hours:

- no customer funds were lost
- the downtime of withdrawal infra was ~14 hours
- our team has hardened the infrastructure in response to the incident

We will share a full post mortem after the internal investigation is completed.
— Kris | Crypto.com (@Kris_HK) January 18, 2022

Security firm PeckShield had also been tracking the developments that followed the Crypto.com hack.

In a tweet, PeckShield said that the stolen Ether tokens were being laundered to undisclosed wallets via cryptocurrency privacy tool named Tornado Cash.

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Tools like Tornado Cash can hide the final destination of Ether tokens being sent into it. By doing this, the hacker wants to ensure that the amount stolen from Crypto.com doesn't get traced back by any means.

The @cryptocom loss is about $15M with at least 4.6K ETHs and half of them are currently being washed via @TornadoCash https://t.co/PUl6IrB3cp https://t.co/6SVKvk8PLf pic.twitter.com/XN9nmT857j
— PeckShield Inc. (@peckshield) January 18, 2022

After the breach was detected, the Hong Kong-based exchange had halted all withdrawal transactions for the time being. An investigation has been launched into the case. Details on how the hack could have happened also remain unearthed.

Marszalek, meanwhile, expressed gratitude to people for their support.

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“I'm particularly happy with two things: the support we received from the community both publicly and in DMs — the opportunity this incident gave us to further strengthen our setup. We learn, we improve, we move forward undeterred,” he tweeted.

As of February 2021, Crypto.com claimed to have over 10 million users.

Last year, the company renamed the Los Angeles Lakers' stadium — formerly known as the Staples Center — to the Crypto.com Arena as part of its advertisement campaign. The deal was worth $700 million (roughly Rs. 5,205 crore).

This hack on the platform comes just days after Crypto.com decided to expand the size of its investment arm called Crypto.com Capital to $500 million (roughly Rs. 3,720 crore) aiming to help fund Web3 startups.

Cyber criminals have begun to target crypto investors and platforms in increasing numbers given the ongoing expansion of the crypto space.

In a hack attack last December, cryptocurrency exchange Bitmart lost nearly $200 million (roughly Rs. 1,480 crore) stored in various cryptocurrencies.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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Further reading: Crypto.com, Cryptocurrency, Hack, Ether, Crypto Hack

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More