M2 Exchange, a crypto exchange based in the United Arab Emirates, recently underwent a security breach involving $13.7 million. The exchange reported that it had acted promptly to resolve the issue, ensuring customer funds were restored and normal operations resumed with heightened security measures implemented.
Cybersecurity company Cyvers discovered odd transactions connected to M2 Exchange that happened on popular blockchain networks like Bitcoin, Ethereum, and Solana. The firm described the hack as an access control violation, detailing that the compromised address received1,378 ETH, 9.7 million Shiba Inu tokens, and 3.7 million USDT. The assets were later changed to ether.
M2 Exchange released a statement acknowledging the breach and emphasized its quick response time, noting it intervened within 16 minutes. The platform highlighted its commitment to user protection and quick return to normal service. “M2 has demonstrated its dedication to safeguarding the interests of our clients by accepting full responsibility for all potential damages. All services are now functioning with strengthened security measures,” the exchange stated.
The exchange also noted that it is currently working with law enforcement agencies to guarantee a comprehensive examination and reaction to the security breach.
Cyvers highlighted the event as a reminder of the increasing vulnerability of both decentralized and centralized financial platforms. The firm noted that the latter face greater risk, with incidents surging by 1,000%, while losses in decentralized ones dropped by 25% during the same timeframe.
Cyvers cited notable historical events like the $235 million Wazirx and the $305 million DMM hacks as illustrations of the dangers that crypto exchanges confront. The security company suggested that crypto platforms bolster their defenses using practical tactics to reduce these threats.
These include strong access control systems, real-time AI monitoring, frequent security audits, sophisticated threat detection techniques, and thorough user and staff training. Additionally, they advised keeping up with regulatory requirements and purchasing cybersecurity insurance.
The recent incident follows another similar event earlier in the year when Rain, a crypto exchange licensed in Bahrain but operating under UAE regulations, experienced a $14.8 million security breach in April. Like M2, Rain managed to restore operations and reinforce security protocols, reflecting the UAE’s strong regulatory environment, which enforces full restitution of lost digital assets.
M2’s and Rain’s rapid and effective responses illustrate a proactive approach to operational resilience. The exchanges are raising the bar for operational security not just in the UAE but also for the larger cryptocurrency sector.
Major industry players like Riot Platforms Inc. (NASDAQ: RIOT) can learn from the swift response of M2 in order to further strengthen their mechanisms for dealing with adverse events like hacks should they ever occur.
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