Draper-Backed Exchange in Lockdown Following ‘Sophisticated’ Attack

The Singapore-based exchange told users Friday that account send functions for cryptocurrencies had been temporarily disabled. Although a spokesperson initially said this was for “network maintenance”, the exchange admitted Saturday it had been victim to an attack and that it would impose account restrictions to prevent “unauthorized transactions,” until the matter had been fully resolved.

Coinhako, a cryptocurrency exchange backed by Tim Draper, has restricted user withdrawals after falling victim to a “sophisticated attack.”

The exchange has not provided further details on the attack’s nature, or any information on whether assets were stolen.

“We have detected a sophisticated and coordinated attack on specific Coinhako accounts, and have disabled the send function as a preventive measure,” a spokesperson said on the exchange’s Telegram channel.

Fewer than 20 Coinhako users are believed to have been directly affected by the attack.

Coinhako’s spokesperson said the attack was not a wallet hack and user private keys were not affected.

Launched in 2014, Coinhako is a popular gateway into cryptocurrencies for Singapore traders through its Singapore dollar trading pairs. The exchange launched an over-the-counter desk in October 2019.

Speaking to CoinDesk, Coinhako CEO Yusho Liu said users’ send function would remain restricted as a “key countermeasure against unauthorized transaction outflows.” The exchange has also reset passwords and two-factor authentication for all users.

Cryptocurrency deposits, trading services and fiat currency withdrawals were still fully functional. Users that had been affected by the attack have also been fully reimbursed, Liu confirmed. The exchange did not respond to questions about the attack’s nature.

Coinhako recieved a six-figure personal investment in December 2014 from venture capitalist Tim Draper soon after coming out of Boost VC, the accelerator run by son Adam Draper.

CoinDesk approached Tim Draper for comment, but he had not responded by press time.

Coinhako is scheduled to resume full operational capacity on March 1.

Despite Denials, Tron Founder Confirms Investment in Poloniex Crypto Exchange

Justin Sun, founder of crypto platform Tron, said he is part of the investor group that recently acquired Poloniex from fintech firm Circle, after denying his involvement initially.

Speaking at a joint Tron-Poloniex event live-streamed over Twitter on Tuesday, Sun said Tron was among several investors in the exchange, but the exchange is operated independently from his company.

Founded in 2014, Poloniex was acquired by Circle in early 2018 for $400 million. The exchange, which once commanded more than 50 percent of exchange transactions, has seen steadily dwindling volume in recent times. Before its recent dispersal, Poloniex had little more than 1 percent of the exchange market.

“Poloniex is one of the biggest exchanges in our industry”, Sun said. “I think the exchange is going to grow and that’s why we collaborate with it to have more initiatives.”

Those initiatives include listing Tron’s tokens on Poloniex and an airdrop campaign of USDT and TRX20 for users on the platform in the next few weeks, Sun said.

While Sun said Tron will also collaborate with Poloniex on trading, he declined to reveal further details about the initiative or other areas of cooperation.

Sun also described Poloniex’s strategy to woo Chinese crypto investors. Chinese users will be able to log in through a new domain pwang.com – which still directs to Poloniex – and the exchange also accepts Chinese government IDs for Know-Your-Customer regulatory purposes, he said.

Last month, Poloniex announced plans to spin out from Circle into a new company called Polo Digital Assets. The new owners planned to spend more than $100 million and shift away from the U.S. to the global market, the company said.

Denying that he had invested in Poloniex, Sun tweeted on the same day: “I’m not buying anything.”

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