BTC Massacre: Three Exchanges Hit

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BTC Massacre: Three Exchanges Hit

By Ian Demartino - min read
Updated 11 June 2021

Three major exchanges have experienced incidents that raise questions about their long term sustainability. Bter, HitBTC and Exco.in have all admitted to hacks or suspended withdrawls. Other exchanges have reported suffering their own issues. CCDEK and ShapeShift.io are the other exchanges that are having issues.

Bter is the largest of the three exchanges hit and it has completely suspended operations. The exchange claims that a hacker has emptied their “cold wallet” of  7,170 BTC, worth around USD $1.75 million at the time and have issued a 770 BTC bounty on information that leads to the recovery of the funds. It is unclear how or if the hacker actually did get access to their cold wallet, believed to be impossible if created properly. This is not the first time Bter suffered a significant hack. It previously lost over 50M NXT in a high profile hack. It managed to negotiate most of that NXT back, but at a cost of a large amount of BTC. This hack is even more significant. Assuming attempts to recover the funds are unsuccessful, it seems unlikely that the exchange will be able to recover again. The site has been replaced with a simple, text only, message that gives info about the transaction that moved money out of Bter’s control.

Bter was also involved heavily in the BitBay scandal. In that scandal Bter had been revealed as creating and pumping its own coin with fake volume.

Exco.in was recently launched in association with Blackwave Labs, which includes members from the Blackcoin community. It announced that it was the victim of its own hack, with the alleged criminal getting off with an undisclosed amount of Bitcoin, NuBits and NuShares. Exco.in has also fingered a suspect, a user named ‘ambriorx’. According to Exco.in, the attacker seems to be none other than DD4BC, who has been previously linked to attacks on Bitalo.com and Nitrogensports.eu. DD4BC currently has a 100BTC bounty on information leading to his arrest on Roger Ver’s bounty hunter site. Exco.in has closed deposits and has promised to liquidate all of their assets in an attempt to pay back users. Samantha Chen, Exco.in’s lead developer, was a member of the BlackWave Labs board. She has resigned from her position at BlackWave Labs.

HitBTC has yet to make an official announcement, but users are reporting that all withdrawals have been suspended. We have reached out to HitBTC for comment and will fill you in with more details as they become available. However, the issue seems to be widespread and considering the events surrounding Exco.in and Bter, speculation is running rampant that the exchange is in a similar situation.

CCDEK and ShapeShift.io’s issues seem much less serious. CCDEK appears to be suffering from a DDoS attack. It is worth pointing out that DDoS is DD4BC’s preferred method of attack, although his previous thefts did not involve stealing Bitcoin directly, preferring instead to use blackmail against his victims.

ShapeShift had some issues with its Bitcoin wallet, but there are no indications that the events are related. It should also be noted that ShapeShift.io doesn’t hold any users funds. It is designed for instantaneous conversion and delivery of various cryptocurrencies. While they must keep some funds reserved to facilitate trades, they don’t hold user funds and would make a bad target for a direct theft.

Bter, Exco.in and CCDEK were or are major exchanges for NuBits and NuShares. Due to the fact that a hacker may be in possession of a significant quantity of both, Shapeshift has temporarily suspended NuBits transactions as well as fellow pegged currency, BitUSD in reaction to the Bter hack.

A silver lining for Nu fans, the currency’s price pegging showcased its power. While NuBits did have some instability as its major exchanges experienced problems, it has since rebounded and sits within ten cents of USD $1.00. Still, a significant portion of NuShares could be missing, Bter previously accounted for 86% of the coin/asset’s volume. NuShares is intended to be used, among other things, for voting on the direction of NuBits. A significant loss of the currency could be significant.

We will have more on this situation in the coming days.

Image courtesy of Shutterstock.com