Poloniex to restore services following $114 million hack

abdelaziz Fathi

Cryptocurrency exchange Poloniex, owned by entrepreneur Justin Sun, has unveiled plans to restore operations after a major hack that drained its hot wallets on November 10.

Justin Sun

According to an official announcement, the platform has made progress in its recovery efforts and is now running smoothly.

The breach, causing an estimated loss of around $114 million, prompted Poloniex to initiate different restoration procedures. The latest update indicates advancements in service restoration, with a focus on reinstating deposit and withdrawal services for users.

Poloniex has engaged a top-tier security auditing firm to bolster its security measures, adding that efforts are actively underway to strengthen the platform’s security before reactivating withdrawals. Though the evaluation process is ongoing, completion is expected in the imminent days.

Assuring users of progress in restoration, Poloniex said it’s working to fortify its platform’s resilience and security measures against future breaches.

The breach resulted in the draining of Poloniex’s hot wallets, with more $100 million worth of tokens sent from the exchange’s Ethereum and Tron wallets across various transactions, according to on-chain data.

Poloniex, established in 2013 and later acquired by Circle in 2018, had several investors including Justin Sun in 2019. Despite the breach, Poloniex maintains its position as a top exchange, having facilitated $616 million worth of trading volume over the last 24 hours, according to CoinMarketCap data.

Cryptocurrency exchanges, frequently targeted by hackers, have witnessed similar incidents in recent months, including hacks on HTX, Bitrue, Gdac, and Deribit, resulting in massive losses.

Justin Sun, also the founder of Tron, offered the hackers a 5% ‘white hat bounty’ with a seven-day deadline to return the stolen funds before involving law enforcement. He provided crypto wallet addresses for the hackers to return the stolen coins.

Earlier this year, the US affiliate of Poloniex paid $7.59 million to settle its civil liability for violations of US sanctions on certain countries. OFAC’s investigation found that Poloniex LLC conducted roughly 66,000 transactions valued at more than $15 million. Between January 2014 and November 2019, the crypto trading platform violated multiple regulations, including those prohibiting US companies from doing business with individuals operating in Iran, Sudan, Syria, Cuba and the Crimea region of Ukraine.

Justin Sun was also charged by the US Securities and Exchange Commission with market manipulation, fraud, and other offenses. Additionally, eight celebrities, including actress Lindsay Lohan and rapper Soulja Boy, have been accused of unlawfully promoting Sun’s crypto assets.

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