Kucoin Hacker Leverages Uniswap to Dump Vast Number of ERC20 Tokens
Since the recent Kucoin hack, the crypto community has been waiting for the hacker to move funds. During the early morning hours (ET) on Sunday, a number of people noticed the Kucoin hacker started to move a large amount of ether and ERC20s to connect with the decentralized exchange (dex) Uniswap.
The cryptocurrency exchange Kucoin was hacked on September 25, 2020, and early estimates said the trading platform lost around $150 million. On Sunday, the estimate is a bit larger, as the crypto community thinks upwards of $200 million in crypto coins were stolen.
Kucoin CEO, Johnny Lyu, explained the situation during a live stream filmed on Saturday and he said that the Kucoin team is continuing to “evaluate the total value.”
Estimates say 1,008 BTC was stolen, along with 14,713 BSV, 26,733 LTC, 9,588,383 XLM, Omni and EOS based tether (USDT) worth $14 million, $153 million of ether and ERC20s, and over 18 million XRP.
Etherscan and other ETH explorers have flagged this address as being involved with the Kucoin hack.
During the early morning hours on Sunday, the hacker started leveraging the dex Uniswap to swap a great number of ERC20s. One particular ERC20 the hacker obtained, is the data token called “Ocean” and the suspect was swapping the token in 10k batches. One observer on Twitter said the hacker dragged the price of the Ocean token down by 4% “in less than an hour.”
“Due to low liquidity for this token, he is going to crash it hard,” the individual added. Other observers said Ocean lost a total of 10% during the early morning (ET) dump.
A great number of other ERC20’s have been obtained by the hacker and armchair sleuths are watching onchain activity closely. Tokens obtained by the Kucoin hacker include Alchemy, Ampleforth, V-ID, Trace, Utrust, Digitex, Synthetix, and many more.
Members of the Ocean Protocol team informed the public that the developers were aware of the Kucoin hackers’ most recent moves. The Ocean dumping invoked the development team to freeze the Ocean token contract.
“As a first action to protect Ocean token holders, we have paused the Ocean contract,” the Ocean Protocol team tweeted. “We will update the community with more information in the coming hours.”
The Block Crypto’s Director of Research, Larry Cermak, also wrote about the event on Twitter, as he watched the Uniswap dumping in real-time. After the hacker briefly paused the Ocean token dumping, Cermak stressed that a “high profile incident like this could bring Uniswap into regulators’ spotlight. Especially if the swapping continues.”
Many of the customers from Kucoin seem to believe the exchange is handling the hack properly and commented on the situation during Johnny Lyu’s live stream on Youtube. One XRP proponent said that Kucoin was being “really transparent.”
“Good for Kucoin,” the individual added. “Sorry you had to go through this nightmare scenario, I hope the perpetrators are caught.”
Kucoin says that customers will be reimbursed and the trading platform will come back online again in about a week. Kucoin also noted that it has been working with various exchanges and blockchain networks, alongside law enforcement officials.
The hack has had very little effects on the crypto economy, in general, as the prices of ETH, BTC, and other top crypto assets this weekend remained relatively stable after the Kucoin incident.