CoinEx finds itself in choppy waters, grappling with a security foul-up that has the crypto community on its feet. When Cyvers Alerts blew the whistle on some sketchy withdrawals from the exchange’s hot wallets, the exchange acted quickly. CoinEx took action almost immediately, ensuring their user base that they would cover any losses.
CoinEx’s own Risk Control System was the first to act on the unusual activity on hot wallets. Shortly after the hack, CoinEx went public, sharing a list of suspicious wallet addresses and calling on the crypto community to help put these accounts on ice.
Urgent Notice: Security Incident on CoinEx – Immediate Actions Underway
On September 12, 2023, our Risk Control System detected anomalous withdrawals from several hot wallet addresses used to store CoinEx’s exchange assets. Promptly recognizing the gravity of the situation, we…
— CoinEx Global (@coinexcom) September 12, 2023
To date, CoinEx has rolled out three rounds of what they suspect are hacker-tied addresses. These are not just any addresses; they are linked to a mixed bag of cryptocurrencies, from Ethereum to XRP and Solana. The exchange is basically sending out a signal to other platforms and users.
For users, the current inability to withdraw funds from CoinEx is causing understandable concern. Yet, the exchange has been transparent about its next steps: withdrawals will restart once they have thoroughly reviewed and isolated the suspicious addresses.
This whole debacle shines a spotlight on the Achilles’ heel of hot wallets. Unlike cold wallets, which are safely tucked away offline, hot wallets are far more vulnerable and tend to become targets of various hacker groups. Luckily, the majority of centralized cryptocurrency exchanges store their strategic reserves in cold wallets in order to avoid any critical situations in the future.
CoinEx is still in the process of assessing the financial impact of this security hiccup. What is noteworthy is their commitment to fully compensate users, a stance that could very well influence how other exchanges deal with similar crises in the future.
