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Representatives of the Four Dragons cryptocurrency exchange from Kyrgyzstan, which suffered from hacking at the end of February, revealed to ForkLog some details of the investigation of the incident.
According to them, unknown persons stole USDT from the platform's hot wallet at the time of a major transaction. To name the amount of damage in Four Dragons refused, referring to the secrecy of the investigation.
Previously, third-party experts estimated the damage in the range from $841,000 to $100 million. However, a source on the exchange said that the maximum damage estimate is overstated.
During an internal investigation, the team managed to restore the chain of funds movement. Initially, the entire amount in USDT was sent to one address. In the future, it was divided into several parts and distributed to different addresses.
Representatives of Four Dragons said that they asked Tether Limited to freeze the funds, but the company's support " sabotaged the appeals for formal reasons."
"The attackers started transferring funds to other cryptocurrencies. A small part went to HTX platforms, SWFT.pro and others. Most of the fraudsters sent to the WhiteBit exchange," the source said.
He stressed that it was thanks to the assistance of WhiteBit that it was possible to track the subsequent movement of funds.
After that, assets through transit bitcoin wallets began to be transferred to the KuCoin exchange. It was on it, according to Four Dragons, that most of the stolen funds turned out to be. In total, the attackers carried out more than 60 transactions.
Match Systems is involved in the investigation of the incident. Four Dragons has taken steps to mark tracked funds as stolen through all major blockchain analyzers, including Coinfirm, Chainanlysis, Crystal Blockchain, and Scorechain.
Marking of stolen funds. Data: Four Dragons.
"KuCoin did not provide any assistance in freezing or at least further tracking funds, despite the fact that they were already marked as stolen at the time they were transferred to wallets in the KuCoin cluster," Four Dragons representatives said.
They turned to KuCoin for comment, as, according to them, "the situation looks at least strange."
In turn, ForkLog also sent an information request to the exchange, but has not yet received a response.
Now Four Dragons continues to investigate together with the cyber police of Kyrgyzstan. They promise a reward of 10% of the returned amount to anyone who helps in the search for stolen funds on the condition of anonymity.
At the same time, the platform's team is negotiating with producers to shoot a documentary about the search for stolen funds.
Recall that in July 2023, the Four Dragons exchange received a license for the right to operate as a virtual asset exchange operator from the Finnadzor of Kyrgyzstan.
On February 22, an unknown person hacked the platform. Despite this, the exchange continued its operations.
According to them, unknown persons stole USDT from the platform's hot wallet at the time of a major transaction. To name the amount of damage in Four Dragons refused, referring to the secrecy of the investigation.
Previously, third-party experts estimated the damage in the range from $841,000 to $100 million. However, a source on the exchange said that the maximum damage estimate is overstated.
During an internal investigation, the team managed to restore the chain of funds movement. Initially, the entire amount in USDT was sent to one address. In the future, it was divided into several parts and distributed to different addresses.
Representatives of Four Dragons said that they asked Tether Limited to freeze the funds, but the company's support " sabotaged the appeals for formal reasons."
"The attackers started transferring funds to other cryptocurrencies. A small part went to HTX platforms, SWFT.pro and others. Most of the fraudsters sent to the WhiteBit exchange," the source said.
He stressed that it was thanks to the assistance of WhiteBit that it was possible to track the subsequent movement of funds.
After that, assets through transit bitcoin wallets began to be transferred to the KuCoin exchange. It was on it, according to Four Dragons, that most of the stolen funds turned out to be. In total, the attackers carried out more than 60 transactions.
Match Systems is involved in the investigation of the incident. Four Dragons has taken steps to mark tracked funds as stolen through all major blockchain analyzers, including Coinfirm, Chainanlysis, Crystal Blockchain, and Scorechain.
Marking of stolen funds. Data: Four Dragons.
"KuCoin did not provide any assistance in freezing or at least further tracking funds, despite the fact that they were already marked as stolen at the time they were transferred to wallets in the KuCoin cluster," Four Dragons representatives said.
They turned to KuCoin for comment, as, according to them, "the situation looks at least strange."
In turn, ForkLog also sent an information request to the exchange, but has not yet received a response.
Now Four Dragons continues to investigate together with the cyber police of Kyrgyzstan. They promise a reward of 10% of the returned amount to anyone who helps in the search for stolen funds on the condition of anonymity.
At the same time, the platform's team is negotiating with producers to shoot a documentary about the search for stolen funds.
Recall that in July 2023, the Four Dragons exchange received a license for the right to operate as a virtual asset exchange operator from the Finnadzor of Kyrgyzstan.
On February 22, an unknown person hacked the platform. Despite this, the exchange continued its operations.
