The cryptocurrency exchange CoinEx is making a comeback after a devastating $70 million hack. The exchange announced today (Friday) that it had taken measures to rebuild its wallet system and ensure the safety and security of its users' assets.
As a result, CoinEx is now gradually resuming deposit and withdrawal services for a substantial number of cryptocurrencies, totaling 190. The platform has asked users to use new deposit addresses to prevent permanent loss of assets.
Navigating Challenges and Restoring Trust
"The wallet system is operating safely and steadily at present. We will gradually resume deposit and withdrawal services for the remaining 500+ cryptos," the exchange said. "Since the resumption of operations will be processed frequently, there will be no further or separate announcements for each crypto."
1/ #CoinExResponseUpdate - This week, we've resumed deposit & withdrawal services for 190+ cryptocurrencies, including $BTC, $ETH, $USDT, & $USDC. Our new wallet system is currently running both securely and efficiently.Announcement: https://t.co/3ij50mCHiA pic.twitter.com/dBeBu0IXre
— CoinEx Global (@coinexcom) September 22, 2023
The exchange has implemented a 100% asset reserve policy, providing an added layer of protection against potential security threats. Notably, CoinEx assured its users that their assets were not affected by the hack and that any financial losses would be covered by CoinEx's User Asset Security Foundation.
The exchange found itself amid a security crisis after suffering a suspected hack this month that compelled the platform to halt all withdrawals. The incident was triggered by the detection of abnormal withdrawals from several hot wallet addresses storing CoinEx's exchange assets. Initial estimates suggest that the losses could tally up to a staggering $70 million and involved Ethereum (ETH), Tron (TRON), and Polygon (MATIC).
Urgent Notice: Security Incident on CoinEx - Immediate Actions UnderwayOn September 12, 2023, our Risk Control System detected anomalous withdrawals from several hot wallet addresses used to store CoinEx's exchange assets. Promptly recognizing the gravity of the situation, we…
— CoinEx Global (@coinexcom) September 12, 2023
Founded in 2017, CoinEx quickly established itself as a prominent crypto exchange, particularly through its focus on Bitcoin Cash (BCH). In recent years, the exchange expanded its offerings, including futures trading, leveraged trading, options trading, and access to over 100 token projects.
Meanwhile, CoinEX decided to cease its operations in New York in June, following a settlement agreement with the Office of the New York Attorney General (NYAG). Additionally, the exchange, based in Hong Kong, agreed to pay $1.7 million, including refunds to investors, in response to allegations of improper registration and misrepresentation as a cryptocurrency exchange.
CoinEX Faces Regulatory Heat
CoinEX found itself in the regulatory crosshairs after the NYAG, Letitia James, accused the exchange in February of failing to properly register as a securities and commodities broker-dealer. On top of that, the exchange faced allegations of misrepresenting itself as a cryptocurrency exchange.
Attorney General James said: "Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk. The days of crypto companies like CoinEx acting like the rules do not apply to them are over. My office will continue to protect New York investors and ensure our state's laws are followed."
In addition to the financial settlement, CoinEX was prohibited from creating new accounts for U.S. customers, although existing customers could still withdraw their cryptocurrency holdings. The exchange was also ordered to implement geo-blocking measures to prevent new IP addresses from New York from accessing its web and app trading platforms.
This article was written by Jared Kirui at www.financemagnates.com.
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