Cyber Attack on Bitrue Hot Wallet Results in $23M Loss

Updated: 14 April 2023

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What – A cryptocurrency exchange, Bitrue, disclosed that it had discovered a vulnerability in one of its active wallets.
Why – The perpetrator managed to remove assets worth roughly $23 million.
What Next – It included Ethereum (ETH), GALA, Quatn (QNT), Holo (HOT), Polygon (MATIC) and Shiba Inu.

Bitrue Hot wallets are a form of cryptocurrency wallet that is connected to the internet and readily accessible, making them more susceptible to cyberattacks and theft compared to cold wallets that are not connected to the internet.

The Singapore-based cryptocurrency exchange further updated its community about the recent exploit through its official Twitter feed:

“We have identified a brief exploit in one of our hot wallets on 07:18 (UTC), April 14 2023. We addressed this matter quickly and prevented the further exploitation of funds. The attackers were able to withdraw assets worth approximately 23 million USD in the following currencies: ETH, QNT, GALA, SHIB, HOT, and MATIC.”

Bitrue stated that it took swift action to resolve the problem, preventing further loss of funds. The crypto exchange emphasized that the compromised hot wallet held less than 5% of the total funds on the platform.

Background Of Bitrue

Bitrue, established in 2018, is a centralized cryptocurrency exchange based out of Singapore. According to CoinGecko, the exchange has a daily trading volume of roughly $2 billion, with BTC and ETH being among the most frequently traded token pairs.

Additionally, the exchange’s representatives declared that they would reimburse all identifiable users who were impacted by the security breach. In addition to this, for investigating purposes, the exchange has halted all withdrawals until April 18.

Interestingly, this is not the first incident that Bitrue suffered a cyber attack. In 2019, Bitrue encountered a similar incident where approximately $5 million worth of Cardano (ADA) and Ripple (XRP) tokens were stolen. That attack happened because of the platform’s internal vulnerability in its review procedures, which allowed cybercriminals to exploit customer accounts.

Hackers’ focus Shifts From Centralized To DeFi Exchanges

In recent years, hackers have transitioned from targeting traditional centralized exchanges to focusing on decentralized finance (DeFi) exchanges.

Chainalysis data reveals that in Q1 2022, cryptocurrency stolen from exchange hacks only accounted for 3% of all stolen crypto, while DeFi protocols accounted for 97% of the stolen assets.

The statistics show a significant increase from 72% in 2021 to 97% in 2022, while only 30% of cryptocurrency was taken from DeFi protocols in 2020. Meanwhile, centralized exchanges, which were once a popular destination for stolen funds, accounted for less than 15% of the total.

The shift is likely due to centralized exchanges adopting stricter Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, making it more challenging for cybercriminals to remain anonymous.

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