OKX Hacked for $47.4M as Cyber Threats Surge

• Cryptocurrency exchange OKX reports a $47.4 million breach.
• Customer wallets in cold storage remained secure.

On July 19, 2024, cryptocurrency exchange OKX announced in a public statement that it had suffered a "sophisticated server breach." The company reported that hackers stole $47.4 million from two newly created hot wallets, but confirmed the breach did not affect customer wallets, which are secured in cold storage separately from internal accounts. Notably, according to a post on July 19 on X (formerly Twitter) by blockchain investigator ZachXBT, the unusual outflows had been flagged 17 hours before OKX's public acknowledgment.

On-chain analysis revealed the hacker used a multi-step process to launder the stolen funds. The attacker first funded a wallet with 1 Ether via FixedFloat, a cryptocurrency mixing service that obscures transaction data, and then routed the stolen funds across multiple blockchains, including Avalanche and Ethereum. To further complicate tracking, the attacker also used a cross-chain bridging technique.

In response, OKX suspended certain Web3 trading features while launching a comprehensive security review. The exchange is now working with cybersecurity partners and the impacted partner exchange to trace the stolen assets, and it has announced it will absorb all financial losses. Furthermore, to prevent future attacks, the company has implemented a bug bounty program to identify and mitigate potential security weaknesses.

In the announcement, CEO Star Xu reassured customers, stating, “Your assets were never at risk. The compromised hot wallets were entirely isolated from user wallets.” While the investigation continues, OKX remains focused on recovering the assets and strengthening its security measures to guard against future threats.