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Poloniex suffers $126 million crypto theft; Justin Sun promises reimbursement

Published 11/11/2023, 02:04 am
TRX/USD
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In a significant cybersecurity incident, the cryptocurrency exchange Poloniex has suffered a theft exceeding $126 million in various digital currencies. The breach was first detected and publicized by Crypto Twitter today, with subsequent confirmation coming from Justin Sun, the owner of Poloniex and founder of Tron.

The unauthorized transactions involved a large spectrum of assets, including USDT, BTC, USDD, USDC, ETH, FLOKI, TUSD, and others. Initially, Poloniex attempted to attribute the disabled wallets to maintenance activities but later acknowledged the severity of the situation amid mounting pressure from user reports and the broader crypto community.

The hacker responsible for the breach carried out sophisticated maneuvers involving both Ethereum and TRON blockchains. By using stolen USDC to purchase TRX on Ethereum and USDT on the TRON chain, they accumulated approximately 206 million TRX, valued at around $22.8 million. This activity led to an abrupt 8% increase in the price of TRX, which is currently trading at $0.10. The price fluctuated between $0.097 and $0.11 over the past 24 hours.

In response to this security lapse, Poloniex has disabled the compromised "Poloniex 4" wallet and is conducting thorough maintenance to address the issue. Peckshield, a crypto-security firm, was instrumental in detecting the irregular outflows that pointed to a wallet labeled "Poloniex Hacker 1."

Justin Sun took to Platform X (formerly known as Twitter) to inform users about ongoing investigations and to offer reassurance that all affected parties will be fully reimbursed for their losses. Moreover, Sun has issued a white hat bounty offer to the perpetrator: a 5% reward from the stolen funds if returned within a seven-day period. Failure to comply with this offer will lead to law enforcement involvement.

This breach is a critical reminder of the vulnerabilities present in digital asset platforms. Poloniex has been operational since 2014 and underwent ownership changes from Circle in 2018 for $400 million to its current owner Justin Sun in 2019. As investigations continue, the crypto community is closely monitoring the situation for further developments and implications for security practices within the industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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