Livecoin cyberattack: hacked servers could result in financial disaster

Livecoin asks customers not to conduct any transactions during the server takeover

Livecoin servers hacked: criminals inflate prices to manipulate the market

The Russian crypto-exchange platform, established in 2017, has lost control of all of its servers, including backend, nodes, news channels, and others, somewhere between December 23rd and December 24th, due to a planned cyberattack.^[1]

On Christmas Eve, the company managed to partially regain access to its frontend servers, which allowed it to post a message on its official website urging the customers to stop all crypto-trading (buying and selling) on its cell phone app and website Application Programming Interface (API).

The cryptocurrency exchange company is doing its best to overcome this issue and stated that:

We're fighting hard to get back our servers, nodes and funds, we're working 24/7. News and next update will come up in the next few days.
We're working in contact with local police authorities. We really do our best to overcome this issue.

Cryptocurrency value and trading volume skyrockets during the hack

Normally, the Livecoin crypto-exchange platform trades around $50 million per day in various cryptocurrencies.^[2] On December 24, the website trading volume increased by almost 1900% to an incomprehensible $995 million.

This might happened due to the fact that once the cybercriminals gained full control of the Russian based company's infrastructure, they skyrocketed cryptocurrency values to a never before seen heights:

• Bitcoins – from $23,000 to $450,000
• Ether – from $600 to $15,000
• Ripple – from $0,27 to $17

These abrupt price changes didn't go unnoticed as the Twitter users quickly started speculating on what has actually happened. Some^[3] were contemplating that the Russian oligarchs may know something more than regular people, while others^[4] were advising not to try and make a quick buck out of this situation because the funds might get frozen.

Livecoin hack isn't an isolated crypto-currency cyberattack instance

Livecoin crypto-exchange still has to report on how much money was lost or stolen during the hack. Another popular cryptocurrency exchange platform, EXMO (based in the United Kingdom), reported that they were hacked on December 21 and that over $4 million in various cryptocurrencies was stolen.

According to sources,^[5] around $1 million was withdrawn in ZEC (zcash) through Poloniex – another popular crypto-exchange platform based in the USA. EXMO stated that users who lost funds or were in other ways affected by this cyberattack would be covered.

A bit earlier this year, in late September, digital asset exchange company KuCoin reported a security breach. The company's CEO Johnny Lyu stated^[6] that one or more hackers got their hands on the company's private keys to a hot wallet (i.e., a cryptocurrency wallet with access to the internet).

Large amounts of Bitcoins and Ethereum cryptocurrency were withdrawn. The KuCoin that's headquartered in Singapore, reported that approximately $281 million were stolen during the cyberattack. Same as with the EXMO crypto-exchange, KuCoin promised that all customers that lost their money would be reimbursed from insurance funds.

Since the cyberattack, KuCoin has recovered around $204 million of stolen money and works closely with local and international law enforcement agencies to further investigate the hack.