Liquid Exchange Hacked, Loses Nearly $100 Million

A crypto exchange known as Liquid – which is based in Japan – has been hacked, leaving it short of nearly $100 million in digital funds.

Liquid Has Lost a Lot of Money

The hackers involved in the incident have allegedly taken as much as $97 million in digital currency at the time of writing. Several assets – including bitcoin, Ethereum and Litecoin – have been stolen. Liquid has reported that the hacker is allegedly transferring this money to as many as four separate wallets.

The company posted a statement explaining:

We are currently investigating and will provide regular updates. In the meantime, deposits and withdrawals will be suspended.

It is a shame to see that after seven years, Japan still does not invoke the protections its crypto customers deserve. Several of the world’s largest digital currency hacks have occurred through Japanese exchanges, the first one taking place in February of 2014. The exchange in question that time around was Mt. Gox, and more than $400 million in BTC funds went missing practically overnight.

From there, things seemed to be quiet until four years later in early 2018 when Coincheck came along. More than half a billion dollars in assorted digital currencies were stolen from the exchange. The event was considered an embarrassment to the country and eventually saw Japan’s Financial Services Agency (FSA) getting involved in the future of crypto regulation.

Overall, the losses between Coincheck and Mt. Gox amount to more than $1 billion, much of which has never been returned or recovered.

As much as $45 million of the stolen Liquid funds were being converted into Ethereum through decentralized trading platforms, some of which were Sushi Swap and Uniswap. Blockchain analysis company Elliptic mentioned in a blog post:

This enables the hacker to avoid having these assets frozen – as is possible with many Ethereum tokens.

This is just the latest in what has allegedly been a string of hacks, a more recent one being the cyberattack on the Poly Network, which oversees several blockchains including those of Binance and Ethereum. As much as $610 million in digital funds were stolen by a hacker, who in a strange turn of events, decided to return more than half the stolen money, claiming he only did it “for fun.”

A String of Hackings

This later led to an open dialogue between both the cyberthief and the financial firm, who offered him a job as its new chief security advisor. The company also said it would throw in a $500,000 sign-on bonus granted the hacker was willing to return the rest of the money. We’ll have more on that story as it develops.

Per data from Coin Market Cap, Liquid stands as one of the world’s top 20 crypto exchanges by daily trading volumes and processes approximately $133 million in transactions over 24-hour periods.

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