Major Threat: Hackers attacked Liquid Global servers cryptocurrency worth $97 million stolen

Second Biggest Heist

 

Hacktivism is one of the most significant threats to the cryptocurrency investors. It is, as if, the pillars of cryptocurrency collapse due to the sudden hit by cyber-attackers. It reduces the risk-adjusted returns, especially for Bitcoins. It compels the cryptocurrency investors to become risk-averse and simultaneously,  the result reduces trading, just as observed in the case of Ethereum.

 

Japanese cryptocurrency exchange Liquid Global stated that some of its digital currency wallets have been hacked or "compromised" and also, the hackers have been transferring into four different wallets.

 

Just as hackers have stolen some $600 million in cryptocurrency from Poly Network, a decentralized finance platform on 10th August. 

 

(Must Check: Cybersecurity in the Internet of Things (IoT) World: 5 Most Common Types of Threats in 2020)

 

Similarly, the second biggest heist (Liquid Global) was reported by Liquid Global on Thursday via Twitter. 

 

The tweet says: "...warm wallets were compromised, we are moving assets into the cold wallet…" 

 

Hot/Warm wallets and Cold wallets are two kinds of wallets of cryptocurrency. 

 

• Warm wallets are also known as "online" wallets. Apparently, they can be convenient in a way one is able to gain access and make transactions rapidly, whereas in the immanent, it lacks security and is vulnerable to theft.

•  On the other hand, cold wallets operate in offline mode. It is the most safest option for storage and the most secure way to store one's Bitcoin and other cryptocurrencies.

 

According to the tweet, they are inspecting the process and will be providing updates from time-to-time. During this process, "deposits and withdrawals will be suspended."

 

Even though Liquid Global did not mention an exact amount of the loss, a blockchain analytics company named Elliptic estimated that about $97 million have been received by the hackers. And this is why it makes the second biggest crypto heist that took place a week later of the Poly Network incident.

 

Out of this huge amount, $45 million in tokens were being converted into ethereum through decentralized exchanges such that it acts as an obstacle for the hacker, just in case the latter decides to freeze the assets.

 

(Also Check: Centralized and Decentralized Cryptocurrency Exchanges)

 

According to The Times Of India, Elliptic observed,  "This enables the hacker to avoid having these assets frozen — as is possible with many Ethereum tokens"

 

Liquid Global mentioned that the hackers had targeted a Multi-Party Computation wallet (MPC), an advanced cryptographic technique which is employed basically for warehousing etc.

 

Liquid Global reassured that they are trying their best to alleviate such a situation and restore normalcy as soon as possible.