Despite blockchain’s protective nature, hackers managed to extract $15 million from Crypto.com, as reported earlier this week. Industry analysts, whose insights were shared by Fortune, consider PeckShield’s observations accurate. These came after the crypto exchange, Crypto.com, attempted to mitigate concerns about the breach, assuring users that their assets remained untouched.
Admitting the hack, Crypto.com stated via Twitter on January 17th that “a small number of users” encountered “suspicious activity.” To preserve users’ assets, withdrawals were temporarily halted. By day’s end, Crypto.com declared the matter resolved, with fortified security and restored withdrawal capabilities, claiming, “all funds are safe.”
Kris Marszalek, CEO of Crypto.com, told Bloomberg TV that the breach impacted 400 accounts. He detailed that withdrawals were swiftly suspended, issues rectified, and normalcy restored within approximately 13 to 14 hours.
The CEO suggested that funds might have been taken, despite prior company denials of loss. He assured that all affected accounts were fully compensated, implying that reimbursement negated the notion of customer losses.
Marszalek, without disclosing the precise amount taken, promised further updates following the conclusion of Crypto.com’s investigation.
Attempts by Crypto.com to convince users of the hack’s minimal impact faced challenges from blockchain security firm PeckShield, based in China. Contrary to Crypto.com’s “all funds are safe” stance, PeckShield identified a $15 million loss. Confirming this, several users on Twitter reported missing funds from their accounts.
Industry analysts backed PeckShield’s claims. Scott Pounder, head of investigations at Crystal Blockchain, confirmed that blockchain data revealed that a significant sum was indeed extracted from Crypto.com.
The crypto exchange’s proactive approach to reimburse affected customers with its capital is reassuring. However, the repetitive assurance that “all funds are safe” could tarnish Crypto.com’s image, potentially undermining its extensive marketing successes of the previous year.
Nevertheless, Crypto.com is not alone in its plight against digital thefts. Even robust security can’t always deter such incidents at exchanges. According to Chainalysis, data and blockchain analytics from 2021 show hackers amassed $14 billion from cryptocurrency thefts, a 79% increase over 2020’s losses.