LCX

On January 8, 2022, LCX, a Liechtenstein-based cryptocurrency exchange, was rocked by a hack that siphoned $7.94 million from its Ethereum hot wallet. The stolen amount included 3.44 million USDC ($3.4 million), 17.25 million LCX tokens ($2.4 million), 761,237 EURe ($864,000), 162.68 ETH ($502,000), and other tokens like SAND, QNT, LINK, and ENJ, as reported by Hacken.

Detected at 12:00 UTC, the attacker accessed the wallet’s private key, though the exact breach method remained undisclosed, likely tied to operational security lapses, per the article. LCX, with a daily trading volume of $50 million per CoinMarketCap, paused deposits and withdrawals within minutes, secured other wallets, and compensated users from its funds, per Twitter (@LCX).

Collaborating with Hacken and law enforcement in Liechtenstein, Ireland, Spain, and the USA, LCX froze 60% of the stolen assets by June 2022, including 500 ETH via Coinbase and 1.3 million USDC via a New York court with a pioneering NFT-based restraining order, per Etherscan. The attacker used Tornado Cash to launder funds, per Reddit (r/CryptoCurrency).

This hack was one of 305 incidents in 2022 costing $3.7 billion, per Chainalysis, and, alongside Bilaxy’s $30 million loss, exposed the risks of using hot wallets.

LCX’s swift response and asset recovery paint a tale of resilience in a crypto realm where vigilance is the only shield against digital bandits, urging exchanges to embrace CCSS standards, bug bounties, and ironclad key management to outwit the shadows.