Around $4 million in cryptocurrency stolen in the Exmo hack has reportedly been withdrawn via Poloniex. Unfortunately, the exchange failed to block several accounts in time.


On December 21, Exmo announced that it had suffered a major hack, forcing the platform to block all withdrawals. Currently, the company estimates total losses in excess of $10.5 million in various digital assets, including bitcoin (BTC), ether (ETH), Tether (USDT), XRP, Bitcoin Cash (BCH) and Zcash (ZEC).


The Exmo team claims that $4 million in stolen assets cannot be recovered because criminals withdrew the funds through Poloniex.


„After receiving information from the Exmo team, we quickly identified and froze two accounts. Unfortunately, the assets were withdrawn hours before we were contacted by Exmo,“ commented a Poloniex compliance representative.


Exmo estimated that hackers withdrew $1 million in XRP and $2.8 million in ZEC from Poloniex. Exmo officials said that this was due to a lack of anti-money-laundering measures on Poloniex. As Poloniex moved its headquarters from the United States to the Seychelles, Exmo filed a report regarding the matter with the Seychelles Central Bank.


Poloniex subsequently denied the Exmo allegations, stating that the exchange adheres to strict AML and Know-Your-Client policies:


„In terms of our KYC and AML policies, Poloniex adheres to strict procedures to monitor, detect and prevent money laundering and financial crime. We use industry-leading software from Jumio, EVS and Elliptic for identification, verification, OFAC, sanctions and transaction tracking. Vulnerable accounts were created over 4 weeks ago and have been fully vetted using the aforementioned software and standards.“


The Exmo team stated that the hack only affected the exchange’s hot wallets and promised to cover the users‘ losses. In an investigation to recover stolen funds, Exmo identified wallets linked to hackers and began collaborating with major exchanges Kraken and Yobit, as well as analytics companies Channelusis and CipherTrace.


On Dec. 2Z Exmo team announced that it plans to resume withdrawals between Dec. 25 and 26.