The Livecoin hack took place last December. Unable to recover from the attack of last December, Livecoin announced its closure earlier this month. The exchange will accept refund claims in the next 2 months.
- In late Dec, the attacker controlled Livecoin servers to increase the platform’s exchange rates and cashed out the funds.
- Livecoin announced its closure this month; the exchange will accept claims for refunds until March 17, 2021.
- The exchange warns its users not to trust any fake groups that ask them to pay to get back their funds.
- Users can use Scorechain solution to mitigate the risk of being involved in the hacked funds.
What happened to Livecoin?
The Livecoin hack took place on Christmas Eve 2020. Indeed, the Russian cryptocurrency exchange reportedly suffered from an attack. The attacker managed to access the Livecoin servers to considerably increase the exchange rates. Then, he/she proceeded to cash out the funds, making huge profits in the process. The exchange didn’t disclose the amount lost.
Unable to recover from the attack, the exchange announced the closure of its business on January 18th in a notice on an alternative domain of its website. The notice reads: “Our service has been damaged hard in technical and financial ways. There is no way to continue operative business in these conditions, so we take a hard decision to close the business and paying the remaining funds to clients.“1
The exchange declared that users can claim back their funds after passing a verification procedure by March 17. No further information was provided about the verification process or the reimbursement timeframe. The exchange also warned its users not to send money to any fake groups in different channels that ask them to pay to get back their funds.
How does Scorechain handle the Livecoin hack?
As soon as Scorechain received the news, the team immediately flagged all the related addresses as “Hack”. Then, the team grouped them in an entity, which gets the risk scoring of 1, meaning the riskiest.
All addresses receiving funds from or sending funds to the hack addresses will be impacted in terms of scoring. Also, the risk indicator “Hack” will be triggered.
Meanwhile, Scorechain’s team updated the information of Livecoin in the Entity Directory. Accordingly, its score went down, as hacking incidents and closures definitely impact the risk score.
How to use Scorechain Solution to avoid risks from hacked funds?
Scorechain users can set up a risk indicator “Hack” in advance. The risk indicator will trigger once the hacked funds flow through an address/ transaction. Users can expand risk indicators on the page as a pop-up and get detailed information. Therefore, the user can’t miss it and they can quickly take appropriate steps.
Besides, users can also set alerts to receive prompt notifications. For example, in this case, users can set up an alert for funds coming from wallets with a score of 1 (hack for example). Then, they will get real-time notifications on the Scorechain platform and by email when an event triggers the alert.
It is important to have proper processes in place to mitigate risks when events such as a hack take place. Therefore, it is vital for crypto-related businesses to implement a good tool like Scorechain’s crypto risk-AML solution to improve risk management.
Want to learn how Scorechain can help you mitigate the money laundering and terrorist financing (ML/TF) risk and fulfill the regulatory requirements? Contact us for a free demo: firstname.lastname@example.org
Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a European leader in crypto compliance since 2015, the Luxembourgish company serves worldwide customers in 29 different countries with more than 150 licenses established, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms, and some LEAs.
Scorechain solution supports Bitcoin analytics with Lightning Network, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, and Tezos. The software is able to de-anonymize the Blockchain data and connect with sanction lists in order to provide a risk scoring on digital assets transactions, addresses and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.