Key Takeaways:
Cryptocurrency exchange Rain has been intermittently down since May 5th, and now on-chain sleuth ZachXBT reports that the Bahrain-based crypto trading platform may have been the victim of a multi-million dollar exploit.
$14.8 Million in Crypto Stolen From Rain Exchange Moved to Bitcoin and Ethereum Addresses
In a report posted on his Telegram channel on Monday, the blockchain analyst wrote that the exchange was likely to have suffered the hack on April 29th that saw its Bitcoin (BTC), Ether (ETH), Solana (SOL), and Ripple (XRP) wallets involved in suspicious outflows.
Approximately $14.8 million worth of cryptocurrencies were quickly transferred from these wallets to instant exchanges, where they were swapped for BTC and ETH, and then moved to two addresses on the Bitcoin and Ethereum network, explained ZachXBT.
Rain had suspended all activities on its advanced trading platform, the Rain “Pro”, since May 5th.
According to data sourced by Arkham Intelligence, the Ethereum address involved in the hack, ending with the suffix “6c28”, is said to hold approximately 1,881 ETH worth around $5.5 million. Meanwhile, the Bitcoin wallet with the suffix “prp2” holds 137.9 BTC, valued at $8.6 million.
It has been found that the stolen funds received by the Ethereum destination address came from various Bitgo multi-signature wallets. There is no confirmation yet as to whether these multi-sig wallets belonged to Rain, but they were involved in transferring over 590 ETH valued at $1.7 million, 20 billion Shiba Inu (SHIB) worth $481,000, 12,500 Chainlink (LINK) worth $169,000, 240,000 USDT, and 500,000 USDC.
All these tokens were promptly swapped for Ether on the decentralized cryptocurrency exchange Uniswap (UNI).
Rain is One of the First Crypto Exchanges to Receive a VASP License in the UAE
Last year, Rain obtained a license to operate as a virtual asset brokerage and custody service for customers in the United Arab Emirates. The license gave the company’s Abu Dhabi-based unit permission to offer crypto-related services to institutional and some retail clients in the Emirates, such as buying, selling, and storing virtual assets.
Rain was forced to lay off dozens of employees during the crypto winter of 2022. The company also raised $110 million in a Series B funding round that year, co-led by venture capitalists Paradigm and Kleiner Perkins, valuing it at $500 million.
Nearly $2 Billion was Lost to Crypto-Related Hacks, Scams, and Rug Pulls in 2023
Researchers at blockchain security firm De.Fi said in their annual report that in 2023, cryptocurrency users lost nearly $2 billion to scams, hacks, and rug pulls. However, this total is roughly half the amount of the previous year.
The reduction in crypto exploits last year is largely attributed to the implementation of robust security protocols, increased awareness within the community, and a decrease in overall activity in the market.
The reduced amount is considered to be even greater when the $40 billion in crypto lost to the collapses of stablecoin issuer Terraform Labs, crypto lender Celsius, and the now-defunct crypto exchange FTX are taken into account.
The analysts also noted that the drop in crypto hacks coincided with the bear market that saw the value of some major alternative tokens slump as much as 85% from their all-time highs in 2021 before starting to recover only towards the tail end of last year.
Furthermore, the recovery rate of funds stolen in exploits improved significantly to around 10%, up from just 2% in 2022, said De.Fi.
Ethereum, the largest blockchain in terms of active users and total value locked, was the biggest victim of crypto-related hacks. In 170 separate incidents that occurred on the network, about $1.5 billion in funds were stolen.
BNB Chain came second with $110.12 million lost across 213 incidents. Whereas, emerging roll-up blockchain zkSync lost $5.2 million in two incidents, and Solana suffered a loss of $1 million in a single attack.
$333 million in crypto was stolen across various hacks that occurred in the first quarter of this year.
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