Seychelles-based crypto exchange loses millions in new hacking incident

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Bilaxy, a Seychelles registered trading platform, recently announced that its hot wallet has been hacked.

Top Bilaxy Urgent Hack Notice

Please note that Bilaxy Hot wallet has been hacked, please stop sending funds to your bilaxy accounts. We run with the time to check and repair. Please wait for a new notice. @ICODrops @ICO_Analytics @CoinMarketCap @

Bilaxie team

– Bilaxy (@Bilaxy_exchange) August 29, 2021

The extent of the loss was unclear, but some estimates claim it is over $ 400 million. HOGE, a DeFi token, confirmed on Twitter that the network lost more than one billion HOGEs worth $ 22 million in the attack. The losses caused by this theft could exceed those of the previous swap attack against the Japanese company Liquid Global. He lost cryptocurrency to the tune of $ 80 million last week.

Following the confirmation, Etherscan was cautious about addresses reported to be involved in the Bilaxy scam.

What attracts hackers?

Centralized cryptocurrency exchanges continue to be the target of hackers due to their abundant liquidity. While some of the major exchanges like Gemini and Binance rely on insurance, this does not mitigate the risk of hacking. He can only ensure a payback to investors without a big haircut. So what is the solution ?

Dr Amber Ghaddar, the founder of crypto platform AllianceBlock, recently told the BBC:

“We need audits and tests. We need to have various standards that need to be monitored in order to protect the integrity of the market if we really want cryptocurrency to achieve mass adoption. “

Regulatory gaps

Centralized cryptocurrency exchanges report a hack, mostly in the event of monetary losses. And the lack of a global reporting framework results in lax security measures. Although exchanges use two-factor authentication (2FA) to execute transactions, this is not enough. Hackers exploit weaknesses in other layers of the protocol to execute an attack, with hot wallets being the most vulnerable.

Therefore, a stock exchange smart contract security audit is a requirement. According to recent reports, the United States Securities and Exchange Commission has signed a deal worth $ 125,000 with AnChain.AI, a blockchain analytics company, to monitor the DeFi industry. The firm will provide preventive solutions to agencies to avoid an attack.

In the event of an attack, authorities will also be able to track the transfer of funds, just as they enforce money laundering regulations. According to Chainalysis, ransomware money laundering is concentrated and often ends up in exchanges after going through a blender to hide origins. Therefore, authorities can effectively track these transfers by a handful of operators to prevent hackers from converting their hack into fiat.

Regulators will need to catch up with technology to keep investors safe. Until then, centralized exchanges can guarantee systematic safeguards like bug bounties, third-party trustee agreements, and foolproof cold storage to ensure increased security.

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