M2 Exchange Loses Over $13 Million in Hot Wallets to Hackers
Calls for Enhanced CEX Security as Number of Hacked Exchanges Grows
M2, a centralized cryptocurrency exchange operating across multiple blockchain networks, has recently suffered a significant hack. On Oct. 31, at 3:16 UAE time, the exchange reported a security breach in which hackers carted away over $13 million worth of digital assets including Bitcoin, Ethereum and Solana.
Within 16 minutes after the hack, at about 3:32 AM, M2 acknowledged the breach and resolved the issue. They further assured customers that the situation has been under control and that their funds have been restored.
Blockchain investigator ZachXBT first broke the news, sharing on his telegram platform,
“The crypto exchange M2 was hacked for ~$13M from hot wallets on multiple chains yesterday.
Theft addresses
ETH: 0x968b6984cba14444f23ee51be90652408155e142
BTC: bc1qu4kh7wa38xpkrp8frgxl4sak88wx0jug8n3vfj
SOL: EKko14NvgqdvNttUb8JjXkVGuUs6BTikjfN3hqW4LQoL”
The incident adds to the fast growing trend of cyber attacks targeting cryptocurrency exchanges. This M2 hack closely follows that of WazirX just a few months prior where hackers stole over $230 million.
M2 Responds
Shortly after the breach, M2 issued a public statement confirming the restoration of all customer funds.
“M2 has taken full responsibility for any potential losses,” the exchange stated. “We are committed to safeguarding our customers’ interests and have implemented additional controls to prevent such incidents in the future.”
Vulnerabilities of CEX and Hot Wallets
CEXs, whilst popular for trading crypto assets, suffer from major problems because their centralized nature makes them very attractive to cyber criminals.
Since centralized exchanges hold funds and private data on centralized servers, they become single points of failure. This means that a successful breach would always result in massive losses.
Likewise, because of their connection to the internet, hot wallets are vulnerable. Their convenience makes them very vulnerable to cyber attacks, as hackers target the wallets for their real-time access to funds. As in the case of M2, the hackers managed to breach the exchange’s hot wallets and seize control of assets worth millions of dollars.
Growing Concerns Over Crypto Exchange Security
While hot wallets are essential for quick and seamless transactions, it has huge security risks. Many experts are now calling for tighter regulations and more stringent requirements for crypto exchanges, hoping to protect investors from the risks of losing their investments to hackers.
Potential security measures like implementing multi-signature wallets, strengthening encryption protocols, and limiting the amounts held in hot wallets are being looked at as possible solutions.
Additionally, some exchanges are exploring advanced technologies like artificial intelligence to detect unusual activity, as well as collaborating with blockchain analysts and experts to track and prevent breaches.
