Crypto exchange Lykke suspends trading after $22 million hack

Lykke, a UK-based crypto exchange, has reportedly suspended its trading operations following an alleged hack that resulted in the loss of more than $22 million. The incident, first reported by on-chain investigators on X (formerly Twitter), has sent shockwaves across the crypto community and raised growing concerns about asset security and protection. Furthermore, the situation highlights the need for implementing strict security measures on cryptocurrency exchanges.

Hacker exchanges stolen cryptocurrencies

On June 4, on-chain investigator SomaXBT reported that Lykke had been hacked and exploited for about $19.5 million worth of cryptocurrencies (158 BTC and 2,161 ETH), pointing out at the time that the exchange team was still hiding the fact.

Subsequent investigation revealed that the hacker had already exchanged all stolen Ethereum (ETH) coins into DAI, an algorithmic stablecoin from MakerDAO and the third-largest stablecoin by market capitalization, and transferred the BTC to several wallets. In addition, Taylor Monahan, a MetaMask developer, revealed that the amount of assets stolen from the platform exceeded $22 million.

Lykke cites “security breach” and assures users of security

While the exchange team initially kept quiet about the incident, several users of the exchange complained that they were unable to withdraw their assets from the platform. However, on June 10, the exchange officially released a statement regarding X, calling it a “security breach.” According to the statement, the systems of Lykke UK and Lykke Corp AG were attacked on June 4, which led to the immediate shutdown of the affected systems to limit the damage. “The security breaches identified were thoroughly investigated and fully remedied,” said the stock exchange.

Lykke further emphasized that it maintains strong financial stability with its solid reserves and diversified portfolio. In addition, the exchange announced that it had uncovered the IP address of the perpetrator, adding that an external criminal investigation had been launched to bring the attacker to justice. The statement concludes by emphasizing the need to shut down the exchange to prevent further losses while the investigation is ongoing. A look at the exchange’s website shows a warning stating that the exchange is under maintenance until further notice.

Lykke is the second cryptocurrency exchange to be exploited in the past two weeks. On DMM Bitcoin, $320 million was stolen on May 31. These sad events underscore the urgent need for enhanced security protocols on all digital platforms.