Auditing Firms Claim Crypto.com Lost $15 Million in Incident as Users Report Suspicious Activity

Auditing Firms Claim Crypto.com Lost $15 Million in Incident as Users Report Suspicious Activity

Crypto.com, a leading cryptocurrency exchange, experienced an incident on January 17 when some of its users reported strange activity in their accounts. The exchange acknowledged the event, and conducted an investigation immediately after, declaring that all funds were safe. However, reports from security and blockchain auditing firms Certik and Peckshield indicate that some funds were removed from exchange wallets. Crypto.com Suspends Withdrawals After Suspicious Activity Reported

Crypto.com, a cryptocurrency exchange, suspended normal withdrawal operations after customers reported having experienced suspicious activity regarding their accounts. In its first statements, the exchange told customers that all funds were safe. The reports led to an enhancement in the security measures applied to access the accounts, with all customers having to sign back into their accounts. Also, the two-factor authentication (2FA) for all accounts had to be reset.

Some customers complained about not being able to reset their two-factor authentication keys, and others declared they were unable to access the exchange as a consequence. After the exchange resumed withdrawals, Kris Marszalek, CEO of Crypto.com, offered a report regarding what happened, stating that the total downtime of the withdrawal infrastructure was about 14 hours. The exchange introduced a new security measure: customers won’t be able to withdraw from whitelisted addresses in the first 24 hours after registration with the platform.

Marszalek reiterated that no user funds were lost and that the company would offer a full post-mortem after its investigation. Blockchain Auditing Firms Report Otherwise

While Crypto.com repeatedly declared that no user funds were affected, there are conflicting statements on the issue. Certik and Peckshield, two security and blockchain auditing firms reported otherwise. Peckshield stated the exchange had lost $15 million, or 4.6K ETH during the event, and that half of these funds were being laundered using Tornado.cash, an anonymity-based protocol that allows users to conduct private transactions.

Certik, another auditing firm, corroborated Peckshield’s report, reporting that the funds were being sent to Tornado.cash. More importantly, Certik informed followers it had compiled a list of user addresses that supposedly were affected in the event, and the number of ether subtracted from each one of these accounts. The company stated that 282 accounts were affected.

The cause of the event is still unknown. Neither Peckshield nor Certik has declared conclusively what happened, and Crypto.com is still conducting an internal investigation on the matter at time of writing. Tags in this story certik, Crypto.com, Cryptocurrency, Ethereum, Event, Kris Marszalek, Peckshield, Tornado cash

What do you think about the suspicious activity that customers of Crypto.com experienced? Tell us in the comments section below. Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved. Heavyweight Champ Francis Ngannou Plans to "Take Half of His UFC 270 Purse Paid in Bitcoin" NEWS | 9 hours ago Bitpay Statistics Show the Use of Bitcoin for Payments Is Dwindling NEWS | 21 hours ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleUK to Tighten Rules on Crypto Ads to Ensure They’re Fair, Clear, Not Misleading Next articleInvictus NFT Lab Blazes Trail for a New Fine Art Paradigm Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRussia’s Tinkoff Bank Enters Crypto Space Through Swiss Company Acquisition

The Russian neobank Tinkoff is joining the world of cryptocurrencies with the purchase of a stake in Aximetria, a Swiss-registered and licensed company which provides clients around the world with services and solutions for digital financial assets. Tinkoff Bank Buys ... read more.Revolut Launches Banking Services in Spain Featuring Deposit Insurance Swiss National Bank Trials CBDC in Transactions With Five Banks Tesla Begins Accepting Dogecoin Payments — Some Merchandise Can Only Be Purchased With DOGE FTX Launches $2 Billion Venture Capital Fund Focused on Bolstering Blockchain, Web3 Adoption