Crypto hacks continue as we enter 2022, with Peckshield recording losses of $6.8M in Ethereum-based tokens from Liechtenstein-based LCX AG.
LCX AG suffered a security breach that compromised one of its hot wallets. They made the announcement on Twitter and assured clients that they had taken security measures to protect other wallets and assets. Deposits and withdrawals are currently suspended. Ethereum tokens like ETH, USDC, EURe, native LCX token and others have been transferred to ETH hacker wallet with following address: 0x165402279f2c081c54b00f0e08812F3fd4560a05. The transfer took place at approximately 22:00 UTC on January 8, 2022. The losses, according to Peckshield, total of $ 6.8 million. Most of the losses suffered included $ 3.4 million USDC, $ 2.2 million LCX, $ 504,000 ETH, $ 468,000 SAND, $ 114,000 QNK, $ 47.4,000 LINK, ENJ $ 10.8,000 and $ 9.7. K-value of MKR.
What is LCX AG?
Domiciled in Liechtenstein, LCX operates a regulated crypto exchange, a decentralized exchange aggregator, and a token sale platform. They also tweeted, “During this difficult period, we greatly appreciate the support from our customers, other exchanges, security experts, and the broader crypto community.”
Hacks are getting too frequent
Hot wallet hacks are becoming more and more frequent. Recently, Bitmart lost $ 196 million when two hot wallets were hacked on December 5, 2021, resulting in the loss of ETH and BSC. Bitmart has promised to return the funds, but affected customers are growing impatient.
AscendEX disabled deposits after $77M worth of ERC-20, BSC, and Polygon tokens were transferred out of its hot wallet on Dec. 11, 2021.
Japanese exchange Liquid Global confirmed the hack of their hot wallets in August 2021. They moved all assets to cold storage wallets and suspended deposits and withdrawals.
Hot wallets have the advantage of being easy to use because they are always online. They come in the form of web-based wallets, mobile wallets, and desktop wallets. Cold wallets are offline and often come in the form of a USB flash drive, otherwise known as a hardware wallet. Hardware wallets are immune to hacking.
The LCX token has fallen 9.8% in the past 24 hours. It is “a long-term sustainable incentive mechanism to motivate various stakeholders to participate in the ecosystem”. The LCX token is issued by LCX AG in accordance with the laws and regulations of Liechtenstein. Based on assessments from law firms, the LCX token can be classified as a utility token under the laws of the United States, Singapore, and Liechtenstein.
