Lykke Crypto Exchange Suspends Trading Following $22 Million Hack

Lykke, a UK-based crypto exchange has reportedly shut down its trading operation after a suspected hacking incident that led to the loss of more than $22 million. The incident which was first reported by on-chain sleuths’ on X (formerly Twitter) has sent shockwaves through the crypto community with brewing concerns about security and asset safety. Moreover, the situation underscores the need for the implementation of stringent security measures in cryptocurrency exchanges.

Hacker Swaps Stolen Crypto

On June 4, the on-chain investigator SomaXBT reported that Lykke had been breached and exploited for about $19.5 million worth of crypto (158 BTC and 2,161 ETH). At the time, he pointed out that the exchange team was still hiding the fact.

Subsequent digging uncovered that the hacker had already swapped all stolen Ethereum (ETH) coins to DAI, an algorithmic stablecoin issued by MakerDAO and the third-largest stablecoin by market cap, and transferred the BTC to multiple wallets. Furthermore, Taylor Monahan, a MetaMask developer disclosed that the amount of assets stolen from the platform has topped $22 million.

Lykke Cites “Security Breach”, Assures Users of Funds Safety

While the exchange team was initially quiet about the incident, several users of the exchange voiced their complaints stating that they were unable to withdraw their assets from the platform. However, on June 10, the exchange officially put out a statement on X citing a “security breach.” According to its statement, Lykke UK and Lykke Corp AG suffered an attack on their system on June 4 which resulted in an immediate shutdown of the affected systems to limit damage. “The identified security breaches have been thoroughly examined and fully addressed,” the exchange said.

Lykke further stressed that it maintains strong financial stability with its solid reserve and diverse portfolio. Furthermore, the exchange disclosed that it had uncovered the IP address of the perpetrator, adding that an external criminal investigation has started to bring the attacker to book. The statement closes by highlighting the need to shut down the exchange to prevent further loss while the investigation is ongoing. A look at the exchange website shows a warning that states that the exchange is under maintenance till further notice.

Lykke is the second cryptocurrency exchange to have been exploited in the past two weeks, following DMM Bitcoin whose platform saw $320 million taken on May 31. These sad occurrences highlight the urgent requirement for strengthened security protocols on all digital platforms.