Last updated on October 28th, 2023 at 08:36 pm
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In response to the recent security breach of the CoinEx exchange hot wallet, as previously reported, the CoinEx team promptly took measures to address the situation after hack.
A New Wallet System:
To avoid future occurrences, CoinEx has created and deployed a new wallet system. This system supports the 211 blockchains and 737 tokens previously traded on the platform.
The exchange emphasizes the stability of its new wallet system but urges users to remain patient during this transitional phase.
“Safeguarding user assets has always been our top priority at CoinEx, and we have been committed to and implemented 100% reserves to safeguard user asset security, since going online in 2017. After this upgrade, we will be further improving our security construction, and risk systems, and investing more in the security field.”
CoinEx resumed withdrawals on September 21 with a 100% full compensation of user funds restoring confidence, trust and commitment after the hack incident.
What Happened At CoinEx?
At 21:20 UTC+8 on September 12th, CoinEx’s Risk Control System detected anomalous attacks on several hot wallets that store assets for its exchange.
According to the exchange’s reports, the root cause of the exchange hack points to compromised private keys for hot wallets that temporarily store the exchange’s assets to facilitate transactions.
As reported earlier, CoinEx disclosed three batches of hacker addresses and asked relevant project teams and exchanges to monitor and freeze the suspicious addresses.
Most times exchanges encounter a security breach. What matters is how an exchange recovers from this incident. Like every other exchange including Binance. CoinEx has bounced back with full customer funds compensation. This demonstrates that users’ funds are 100% secured.
Moreover, the hacks are usually due to a security breach tied to a hot wallet or a phishing and virus attack — to obtain a large number of two-factor authentication codes and API keys.
Restoring User Trust and Confidence
According to its response to the recent CoinEx hack, the exchange explained its commitment to setting up CoinEx Risk-Prevention Funds to enhance its preparedness and response capabilities for contingencies.
Also, the CEO of CoinEx took a proactive stance by extending a heartfelt apology to the users affected. This genuine gesture shows the company’s willingness to take responsibility for the breach and prioritize customer trust and satisfaction.
The CEO’s public acknowledgement and commitment to resolving the issue promptly set a tone of transparency and accountability. CoinEx didn’t stop at words alone, they went the extra mile by ensuring 100% compensation to those affected by the breach.
This trustworthy approach, not only displayed the exchange’s commitment to protect user assets but also provided reassurance to the broader community, affirming CoinEx’s commitment to securing users’ assets.
Users have reacted positively to the way the exchange was able to handle the situation and restore trust and confidence.
Key Distinguishing Factors
One of the key distinguishing factors of CoinEx’s response was its real-time progress updates.
The exchange team took it upon themselves to regularly communicate with users, sharing information on the investigation’s progress, recovery efforts, and security enhancements implemented to prevent future breaches.
This level of transparency instilled a sense of confidence among users and motivated other exchanges to adopt similar practices.
To promptly address the issue and alleviate user concerns, CoinEx actively sought assistance and mobilized industry forces to collaboratively resolve the problem.
Additionally; the below recommended 6 key factors will help users in choosing the right exchange in the wide crypto world, filled with many crypto exchanges.
These 6 Key factors include;
- Insurance Fund
- Security
- Fiat Exchange
- KYC/AML
- Volume
- Reputation
CoinEx has strong KYC/AML measures in place ensuring that it is regulatory compliant with the right legal status. The exchange has a 4.0 rating on investing.com, an excellent rating which reaffirms the exchange’s strong reputation among its peers.
CoinEx has insured users’ funds through CoinEx Risk-Prevention Funds ensuring asset security in cases of any contingency. Also, the security system follows a world-class standard approach with user security tips for user account protection.
Additionally, there is enough liquidity pool on CoinEx and trading pairs. CoinEx has over 730 tokens listed on its exchange with enough volume for traders across all pairs.
Security Approach Going Forward
This also leads us to contemplate how the industry will build a robust security framework in the future.
Whether to observe from a distance or actively participate in the solutions will determine users’ evaluation of a crypto exchange and their attitude towards the development of the cryptocurrency industry.
CoinEx seems to actively create such a framework with its newly revised security protocol prioritizing user funds protection and a seamless trading experience.
Conclusion
Cryptocurrency exchanges have always been vulnerable to security breaches, and it is not uncommon to hear about incidents where user funds are compromised.
However, how an exchange handles such a situation speaks volumes about its integrity and commitment to customer security. In the face of a security breach, CoinEx has earned recognition from users and the industry for its responsible attitude and proactive problem-solving approach.
From the CEO’s genuine apology and the commitment to complete funds compensation to the team’s proactive communication. CoinEx’s actions have inspired other exchanges to adopt similar approaches.
