CoinStats CEO Attributes 2 Million Crypto Hack Loss to Social Engineering Tactics
On June 22nd, the esteemed cryptocurrency platform CoinStats was hit by a significant security breach, prompting an immediate halt to all operations. The incident led to the unauthorized withdrawal of digital assets valued at $2 million from several user wallets. The company’s swift response curtailed further losses. This theft resulted in a loss of cryptocurrency from nearly 1.3% of CoinStats’ wallets.
In total, 1,590 wallets were compromised, with the estimated stolen assets amounting to roughly $2 million. Narek Gevorgyan, the CEO of CoinStats, attributed the breach to a sophisticated social engineering scheme. A staff member was deceived into installing malware, granting the attacker access to the company’s AWS infrastructure.
**CEO’s Statement and Investigation Insights**
Gevorgyan addressed the public via social media on June 26th, five days post-incident, to disclose the findings of the internal investigation. The cyber-attack was confirmed to be the result of a targeted social engineering effort against a company employee, leading to the subsequent breach of CoinStats’ systems and the loss of funds from affected wallets.
In his social media update, Gevorgyan expressed regret over the incident and discussed support measures for the victims. However, he stopped short of confirming whether those impacted would receive compensation.
While CoinStats reported a $2 million loss, additional reports from the community indicate that the actual damages may be more substantial. According to Wu Blockchain, a wallet associated with Blurr.eth lost approximately 3,657.46408 MKR tokens, valued at around $8.7 million based on current exchange rates. Following the theft of 3,657 MAKER cryptocurrencies, the perpetrator liquidated 2,482 ETHER, causing a 7% drop in the value of MKR within minutes. CoinStats has not yet addressed or verified these additional claims.
**Wider Implications of Cryptocurrency Security Incidents in 2024**
The security breach at CoinStats is indicative of a growing pattern of cryptocurrency hacks in 2024. A quarterly report by Immunefi reveals that there were 72 separate incidents, resulting in losses of $572.7 million due to hacks and scams.
This figure represents a staggering 70.3% increase from the $336.3 million lost in the preceding quarter and nearly doubles the $265.5 million that vanished in a single quarter of 2023.
For further reading:
“Crypto Hacks and Scams Surge in Q2, Costing Crypto Industry Over $573 Million”
**Tags**: Hack