TLDR
- After a critical security lapse on June 4, Lykke, an England-rooted cryptocurrency exchange, has paused all customer activities following a devastating $22 million loss in diverse crypto holdings.
- SomaXBT, a blockchain security specialist, first identified the hack and alleged that Lykke's team tried to conceal the situation from the public.
- Lykke confirmed the attack, admitting that it impacted both Lykke UK and Swiss Lykke Corp AG, and expressed sincere apologies to affected users and partners.
- With claims of substantial financial reserves and a diversified investment palette, Lykke assures users their assets remain safe and are in the process of recovery.
- Seeking to reclaim the compromised digital assets, Lykke is working with a cybersecurity firm, while pursuing a criminal investigation based on the hacker's tracked IP addresses.
A notable player in the UK cryptocurrency market, Lykke faces a substantial security breach involving $22 million in digital currencies.
In response to a severe security compromise on June 4, Lykke ceases all exchange operations, stirring anxiety among its clients and the broader crypto community.
SomaXBT, a blockchain investigator, spilled details of Lykke's breach, accusing the company of hiding a $19.5 million crypto asset loss, despite new evidence surfacing on social media.
The researcher released evidence via a Discord post allegedly showing Lykke claiming an unexpected complete system maintenance was underway.
Both Lykke UK and Lykke Corp AG fell victim to a system attack on June 4. They promptly halted operations to mitigate further damage and have since patched the identified vulnerabilities.
— Lykke✨ Zero-fee crypto exchange✨ (@lykke) June 10, 2024
As news of the breach spread, Lykke users voiced their unease online. Various reports of service issues and emptied accounts fueled speculation about the hack's magnitude.
Finally, on June 10, Lykke issued a statement confirming the attack’s impact on both Lykke UK and Lykke Corp AG.
The platform offered a heartfelt apology for any stress or inconvenience caused, reiterating the safety of client assets and pledging complete reimbursement.
Boasting a healthy capital cushion and a well-diversified portfolio, Lykke promises sufficient resources to bear any attack-related financial strain, aiming to resolve the situation quickly.
To address the breach’s aftermath, Lykke enlisted an independent cybersecurity company to assist in asset recovery while fortifying defenses.
Prepping for legal action, Lykke utilized hacker-specific IP traces to spark a criminal probe.
on June 4, @lykke CTX experienced a security flaw, resulting in a $19.5 million crypto loss, though their team seemed to minimize the incident.
BTC (158 btc)
bc1qt64756h9aylujm9tpk826zndegpxtngmr6eqadETH (2161 eth)
0x9172a72f5009ca609833819763A2722e53806443 pic.twitter.com/bT4TaQLukY— SomaXBT (@somaxbt) June 9, 2024
This breach at Lykke surfaces amid a streak of targeted attacks on centralized exchanges. For instance, Rain faced a $14.1 million hack in April, later securing users' funds with its reserves.
The recurring security challenges spotlight the urgent need for fortified protective strategies in centralized exchanges to safeguard users' assets.
As the digital currency realm progresses, exchanges must emphasize implementing advanced security frameworks and frequent audits to deter future incidents.
Lykke’s security failure also reinvigorates discourse on the transparency and liability of centralized exchange mechanisms.
This incident prompts a call within the crypto spaces for stricter regulatory supervision and a shift towards decentralized models to mitigate the risks inherent in centralized systems.
