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CDS Crypto News Crypto News- Kraken Reports Extortion Incident Following Bug Bounty Disclosure

Crypto News

Crypto News- Kraken Reports Extortion Incident Following Bug Bounty Disclosure

sevval20/06/20241 Mins read33

Crypto News- Kraken Reports Extortion Incident Following Bug Bounty Disclosure

Crypto News– Cryptocurrency exchange Kraken disclosed that a research team has retained $3 million worth of digital assets it accessed through a recently discovered bug.

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An anonymous self-proclaimed ‘security researcher’ identified a critical security flaw and notified Kraken on June 9.

However, Nicholas Percoco, Kraken’s chief security officer, revealed that two accounts associated with the researcher exploited the bug to withdraw over $3 million worth of digital assets.

In a June 19 post on X, Percoco stated that following the multimillion-dollar withdrawal, the researcher is demanding a reward for the stolen funds.

In the essence of transparency, we are disclosing this bug to the industry today. We are being accused of being unreasonable and unprofessional for requesting that “white-hat hackers” return what they stole from us. Unbelievable.
— Nick Percoco (@c7five) June 19, 2024

The cryptocurrency was stolen directly from Kraken’s treasury. The exchange assures that no user funds were at risk.

Kraken Labels This as Non-Ethical Hacking

One of the three Kraken accounts involved in the exploit had previously undergone Know Your Customer (KYC) verification by an individual claiming to be a security researcher, whose identity remains undisclosed.

The individual initially demonstrated the bug by executing a crypto transfer worth $4, which was enough to validate the flaw and potentially qualify for substantial rewards from Kraken’s bounty program.

2024 Crypto Hacks Poised to Surpass 2023’s Numbers

In 2024, crypto hackers and exploiters appear set for a potentially more lucrative year compared to 2023.

During the first quarter of 2024, hackers pilfered digital assets worth $542.7 million, marking a 42% increase from the same period in 2023. Interestingly, private key leaks emerged as the primary cause of these exploits, surpassing smart contract vulnerabilities.

According to Merkle Science’s 2024 Crypto HackHub Report‘ funds lost due to smart contract vulnerabilities plummeted by 92% to $179 million in 2023, down significantly from the staggering $2.6 billion recorded in 2022.

For the latest in crypto updates, keep tabs on Crypto Data Space.