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Massive Hack on Four Dragons Crypto Exchange Steals $100 Million

The Kyrgyzstan cryptocurrency exchange Four Dragons reports that its security system was hacked and about $100 million in funds were stolen.

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On February 22nd, a hacker attack caused a large amount of cryptocurrency to be taken from the exchange platform. Four Dragons did not disclose how much that was, but estimates put it around $100 million. The exchange said only that the figure was significant.

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Hackers were able to get into the hot wallets on the exchange, but it is not clear how that happened. Speculation is that there was an insider that permitted the attack or that the site’s security was compromised and was attacked by hackers on the outside.

The Outcome for Four Dragons and Customers

How has this impacted the Kyrgyzstan-based exchange? Operations are continuing normally, even though some of the liquidity has been lost, reports Four Dragons.

The exchange issued a statement saying that no obligations to partners and clients will be affected. They further reported that there were sixteen Bitcoin addresses where stolen coins were sent. These addresses were disclosed, but at the time of this writing, most of the cryptocurrency stolen to those accounts remains there.

Four Dragons said that they were taking all measures possible to keep the funds from being used and asked that anyone reading their announcement keep that in mind. They also offered a reward of 10% of the amount returned, to be given to anyone who assists in receiving the pilfered funds.

The attack raises fears of the vulnerability of digital trading platforms and cryptocurrency. The anonymity of such transactions makes them difficult to track, and it also makes it difficult at times for authorities to identify who is responsible.

Virtual assets are being lightly regulated by the Kyrgyzstan government. There is some ambiguity as to how many of those regulations should be enforced at this point because they are so new. The government does not have any guidelines in place specifically for crypto exchanges, since their 2022 legislation deals with virtual assets and not exchange regulation.

 

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ABOUT THE AUTHOR See More
Timothy St. John
Timothy St. John
Financial Writer - European & US Desks
Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.
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