On Dec. 21, Exmo announced a major hack causing the platform to freeze all withdrawals from the exchange. At the moment, the United Kingdom-based company estimates total losses to stand at more than $10.5 million in different digital assets, such as Bitcoin (BTC), Ether (ETH), Tether (USDT), XRP, Bitcoin Cash (BCH), and Zcash (ZEC).
According to Cointelegraph, Exmo executives claim that as much as $4 millions of totally stolen assets cannot be recovered due criminals withdrawing the funds through Poloniex. A spokesperson at the Poloniex Compliance Department stated:
“After we received the information from the Exmo team, we quickly identified and froze the two accounts. Unfortunately, all affected assets had been withdrawn hours before we were even contacted by Exmo.”
According to Exmo’s calculations, Poloniex allowed hackers to withdraw $1 million in XRP and $2.8 million in ZEC. Exmo executives claimed that the reason behind the loss was lack of Anti-Money Laundering measures applied by Poloniex. As Poloniex allegedly moved its headquarters from the United States to Seychelles, Exmo filed a report on the issue to the Seychelles Central Bank.
Poloniex consequently denied Exmo’s allegations to Cointelegraph, stating that the exchange has strong AML and Know-Your-Customer policies:
“Regarding our KYC and AML policies, Poloniex adheres to stringent procedures to monitor, detect, prevent and report possible money laundering and financial crimes. We utilize industry-leading software from Jumio, EVS and Elliptic to conduct identification, verification, OFAC, sanctions and transaction tracing. The affected accounts were created more than 4 weeks ago and were fully verified using the aforementioned software and standards.”
In a Dec. 23 security incident update, Exmo stated that the exchange expects to start resuming withdrawals for major cryptocurrencies between Dec. 25 and 26.