In a Darwin-esque world where adapting to the changing times is the only way to move forward, blockchain and cryptocurrency addressed many pain points of a lacking financial system when they were first introduced. While the crypto market has gone through waves of changes with bulls and bears, hacks seem to have remained, quite ironically, constant in this ecosystem.
While hacks send pangs of fear in the minds of users, traders, and stakeholders alike; companies and exchanges can use them as an opportunity to reevaluate their policies and build a more open connection with the users.
A $70 million hack and subsequent action
Recently, CoinEx underwent a $70 million hack when its Risk Control System flagged “anomalous” withdrawals of large amounts of coins and tokens to the same address. While the cause of the hack was attributed to compromised private keys, the CoinEx team was very speedy in its handling of this crisis as it quickly suspended its withdrawal services.
To all CoinEx users & friends: We deeply regret the recent hack and extend our sincerest apologies to those affected. Your concern and attention have not gone unnoticed.
— Haipo Yang (@yhaiyang) September 14, 2023
Haipo Yang, the founder and CEO of CoinEx went public with a heartfelt apology and assured affected users of prompt action. He took to X and expressed his deepest regret on the recent hack while also reassuring users of their determination and dedication to overcome this challenge. Yang’s admittance of the situation set a tone of transparency and brought about accountability that was further shown in the exchange’s real-time progress update about the fund retrieval process.
Furthermore, the exchange also promised its users 100% fund compensation as investigations are underway. CoinEx called upon major industry leaders and forces for a cross-collaborative approach to handling this security threat and deliberating on building a robust security framework in the future.
Watertight contingency plans
Apart from suspending its withdrawal service, CoinEx’s team also promptly transferred their remaining assets to a secure cold storage, and opened channels of communication to the hackers hoping for cooperation and an agreeable resolution.
The exchange reactivated deposits and withdrawals for more than 346 coins and launched its new wallet system after stringent security checks in phases. Additionally, they are formulating a tailored compensation plan on a per-coin basis for the affected users.
Apart from upgrading its wallet architecture and freezing related suspicious addresses, CoinEx is steadfastly building its Risk-Prevention Funds to enhance its readiness for contingencies.
Looking at the brighter side
Hacks can be a driving force for the general crypto space as they bring to light the pitfalls of the systems and help in building a more secure system which, in turn, is crucial for mass adoption.
While exchanges are one of the most vulnerable links to the crypto ecosystem, when taken as a scope for improvement, hacks can help bring about a rigid system that becomes more stable for mainstream use. At the same time, an exchange’s handling of such a setback shows its commitment and diligence to not just its own user base but also the wider crypto community.
CoinEx has proven its adherence and integrity with proactive action and problem-solving without shying away from owning up to its mistakes. The exchange shows hope for a more secure and holistic cryptosystem in the future as it is standing true to its user-first approach.
Check out the CoinEx website, and check out the updates on their social media here.
Disclaimer: This article may be in collaboration with a valued partner. Reader discernment is advised. Please read the advertorial disclosure on our privacy policy page for further clarification.
