Lykke Cryptocurrency Exchange Halts Withdrawals After Exploit: Users’ Funds Safe and Will Be Recovered

Lykke cryptocurrency exchange has been in the spotlight after suffering an exploit on June 4, leading to the halt of withdrawals. The exchange assured users that their funds are safe and will be recovered, despite the attack affecting both Lykke UK and Lykke Corp AG.

The centralized cryptocurrency exchange, based in Switzerland and launched in 2015, prides itself on being a “no fee crypto exchange” and claims to have roots as a prominent forex broker. However, recent events have raised concerns about the security of the platform.

Blockchain security researcher SomaXBT brought attention to the attack on June 9, accusing the team of trying to conceal the security breach. They claimed that Lykke lost $19.5 million worth of crypto assets in the exploit. The exchange responded by stating that withdrawals were paused as a preventative measure and that a cybersecurity team had been hired to recover the stolen assets.

Despite the setback, the Lykke team expressed apologies to affected users and reassured them that the exchange has solid capital reserves and a diverse portfolio to weather any potential losses. They also mentioned that they have identified the IP addresses of the attacker for a criminal investigation.

This incident adds to a growing list of exploits against centralized exchanges, with researchers uncovering vulnerabilities that could potentially compromise user funds. It serves as a reminder of the importance of security measures in the cryptocurrency space and the need for exchanges to prioritize the protection of their users’ assets.