As early as 2014, Mt.Gox, once the world’s largest bitcoin exchange, lost at least 850,000 bitcoins and filed for bankruptcy due to hacking, becoming one of the most famous cases. Another veteran exchange, Bitfinex, also had an incident that shocked the industry: in August 2016, due to a security breach, 120,000 Bitcoins were stolen, with a total value of $75 million at that time, leading to panic selling in the market.
Compared with traditional financial markets, the anonymity of blockchain greatly increases the difficulty of recovering stolen assets. Fortunately, with the continuous technological advancement and the cooperation of industry partners, the response to hacker attacks has become more rapid, and the possibility of recovering assets is increasing.
Recently, after 6.5 BTC of Bitfinex’s stolen assets flowed into Poloniex, the Poloniex team successfully returned the assets to Bitfinex through the rapid response and complete process.
Assist in the recovery of stolen assets
On 15 April 2021, the analytic bot Whale Alerts sounded an alarm over a series of BTC transfers, which are tied to the Bitfinex hack in 2016.
As the hacker transaction activities have always been under close surveillance, the Bitfinex team noticed that 6.5 BTC were transferred to Poloniex, and contacted Poloniex’s security department for assistance.
After receiving the notice, Poloniex started the ownership verification with Bitfinex and requesting for evidence from the Italian police and US FBI.
During the following months, this issue has always been one of the top priories of the Poloniex security & compliance department. It actively kept consistent communications with all relevant parties of the investigation process, including on-chain data verification, ownership verification and legal procedures for transfer, etc.
After full confirmation of the ownership and compliance checks of the return process, Poloniex officially returned the 6.5 BTC to Bitfinex.
Although this is only a small part of the stolen assets, it is enough to prove Poloniex’s unswerving determination and ability to protect and retrieve users’ assets.
Safety is paramount and lives up to expectations
Asset security and risk control capabilities are the foundation and core competitiveness of exchanges, which are also the prerequisite for users to choose an exchange.
As a veteran exchange that has been operating safely and stably in the industry for nearly eight years, Poloniex has attached great importance to security since its inception and has gained a good reputation ever since.
Poloniex has continuously invested a large amount of money, manpower, and time in improving the security of the platform, to maximize the full protection of users’ data privacy and financial security.
Besides, Poloniex also adopts a series of safety measures, such as the AML system with complete mechanisms and procedures, strict risk control systems, and efficient emergency response plans.
Take the internal risk control process as an example. When other exchange reports that there is an inflow of illegal assets to Poloniex, the security department will first verify the contact person’s identity, then proceed to ask for more details about the transaction. After verifications, related transactions will be blocked, and the case will be forwarded to the compliance department for further investigation. If the fund is proven stollen, Poloniex will proceed with the return procedure.
In terms of the external part, Poloniex established collaborative relationships with other relevant institutions to reduce crimes, return stolen funds, and protect players in the industry.
It can be said that Poloniex’s security mechanism, risk control strategy and process, and technical performance are more advanced and reliable than most exchange platforms. It not only leads the industry but also gains more and more users’ trust and recognition.
Although the industry is still in the early chaotic and barbaric development stage, Poloniex has never relaxed its self-restraint and is committed to building a healthy, equal, transparent, and safe industry ecology. Security is still the biggest challenge facing the exchange. Poloniex will continue to maintain its technological leadership, insist on safety first, and provide higher security services for global users.
was originally published in The Poloniex blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
