Unocoin shuts down crypto services amid security breach
What's the story
Unocoin, one of India's oldest cryptocurrency exchanges, has suspended all its services following a security breach. The company is now in the process of rebuilding its entire server system from scratch. The decision to suspend operations was taken "in the interest of protecting customer assets and data," according to a security update issued by Unocoin on Thursday.
First actions
Unauthorized activity detected on November 6
The first sign of unauthorized activity was detected on November 6. In response, Unocoin asked BitGo and Fireblocks to freeze its enterprise accounts.
Both companies confirmed the freezes, preventing any further transactions through their platforms.
At that time, no cryptocurrency funds were reported missing from these accounts.
Ongoing investigation
Breach extent yet to be ascertained
Despite these initial security measures, unauthorized activity continued on November 9. This prompted Unocoin to suspend all its services to protect customer assets and data.
An internal investigation revealed that its infrastructure had been compromised, but the full extent of the breach remains unclear.
The company has not yet determined which systems were accessed or what information may have been exposed during this incident.
Security protocols
Investigating unauthorized outgoing transactions
Unocoin has said that over 90% of customer cryptocurrency funds are kept in cold storage, or offline. The company is working with BitGo and Fireblocks to determine the full status of its holdings.
However, on Thursday, Unocoin detected outgoing transactions from an Ethereum address in its BitGo wallets.
The exchange has escalated this matter to BitGo, which is now investigating the issue as a priority.
Rebuilding process
Rebuilding server infrastructure
In light of the breach, Unocoin has opted to rebuild its entire server infrastructure from scratch instead of restoring the existing systems. The company estimates that this process will take around four to five working days.
Its immediate priorities include identifying the root cause of the breach, assessing potential data exposure, verifying cryptocurrency holdings with BitGo and Fireblocks, and conducting comprehensive security checks before resuming services.