CoinStats Suffers $2 Million Loss in Crypto Hack, CEO Points to Social Engineering Tactics

On the 22nd of June, CoinStats, a prominent crypto platform experienced a major security threat forcing them to stop all their services temporarily. $2 million worth of digital currency was taken off from some people’s wallets. Through quick intervention by company, the situstion was controlled to prevent more loss. Stealing away $2 million meant that almost 1.3% of CoinStats wallets lost crypto due this theft.

1,590 crypto wallets were affected by the breach, and the total stolen crypto is approximately $2 million. According to CoinStat’s CEO Narek Gevorgyan, the breach was caused by means of social engineering. Consequently, a CoinStats’ staff member was hoaxed into downloading infected software through which a hacker obtained access to AWS infrastructure of a company.

CEO’s Response and Investigation Findings

Five days after the incident, on June 26, Gevorgyan went to social media where he revealed the outcomes of an in-house research. It has been proved that the cyber-attack was as a result of a social engineering attack on one of the workers in their company. Consequently, CoinStats infrastructure was hacked hence moneys getting lost from the wallets that were hit.

He tweeted that it was unfortunate what had happened & talked about ways in which they would assist those affected; though he didn’t make it clear if refunds would be made to those who were hacked.

CoinStats has disclosed a loss of $2 million while community reports suggest that the actual losses is bigger. Blurr.eth associated wallet reportedly lost 3,657.46408 MKR tokens that are around $8.7M going by current rates as per Wu Blockchain. He sold off 2,482 ETHER after stealing 3657 MAKER Cryptocurrency leading to a collapse of 7 percent within minutes for MKR. CoinStats is yet to either comment or verify these extra assertions.

Broader Context of Crypto Hacks in 2024

The CoinStats hack is part of a broader trend of increasing crypto security breaches in 2024. According to the quarterly report from Immunefi, there were 72 incidents in which $572.7 million were lost to hacks and scams. 

This is an enormous leap from $336.3 million that were lost in the previous quarter marking a whopping 70.3% increase and almost double too when compared against $265.5 million that disappeared within just one quarter back in 2023.

Also Read: Crypto Hacks and Scams Surge in Q2, Costing Crypto Industry Over $573 Million