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CertiK Auditor Criticized for Kraken’s $3 Million Loss

Published

2 weeks ago

June 20, 2024

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After the reported $3 million loss from Kraken exchange’s treasury, smart contract auditor CertiK has revealed an association with the incident.

The trading platform tried to recover the funds immediately but resorted to law enforcement, citing a case of extortion.

CertiK Shares Perspective on Kraken’s Loss

Kraken exchange’s recent $3 million bug attack has been linked to smart contract auditing firm CertiK, which confirmed the association. They discovered a series of critical vulnerabilities that could potentially lead to hundreds of millions of dollars in losses.

Following the discovery, the researchers took the initiative to explore the vulnerability, with three questions driving their research.

Can a malicious actor fabricate a deposit transaction to a Kraken account?
Can a malicious actor withdraw fabricated funds?
What risk controls and asset protection might trigger from a large withdrawal request?

According to CertiK, the trading platform failed all the tests, which led it to conclude that Kraken’s “defense in-depth system is compromised on multiple fronts.”

“According to our testing result: The Kraken exchange failed all these tests, indicating that Kraken’s defense in-depth-system is compromised on multiple fronts. Millions of dollars can be deposited to ANY Kraken account. A huge amount of fabricated crypto (worth more than 1M+ USD) can be withdrawn from the account and converted into valid cryptos. Worse yet, no alerts were triggered during the multi-day testing period. Kraken only responded and locked the test accounts days after we officially reported the incident,” read the report as highlighted in a post.

CertiK presented these findings to Kraken Exchange, whose security team classified them as “critical,” the most serious classification level at the trading platform. Unfortunately, it all culminated in a case that required the involvement of law enforcement.

“Kraken’s security operation team threatened individual CertiK employees to repay a mismatched amount of crypto in an unreasonable time even without providing repayment addresses. The verbal consensus reached during our meeting was not confirmed afterward. Ultimately, they publicly accused us of theft and even directly threatened our employees, which is completely unacceptable,” CertiK told BeInCrypto.

CertiK has urged Kraken to cease the threats against their persona, which is termed “Whitehat hackers.” The smart contract auditor has shared all testing deposit transactions. They added that they moved all funds to an accessible account with Kraken.

Auditor Being Judged For $3 Million Bug-Attack

Despite CertiK’s efforts to shed light on the matter, the crypto community has criticized the researchers, calling them out for malpractice. One user observes that “the sentiment around this story would have been more positive if resolved friendly with Kraken and posted about it after.”

Developer Uttam Singh’s summary of the event ridiculed several aspects that make the case tilt further against CertiK. He highlights the fact that the researchers performed multiple transactions and that they waited five days before disclosure.

According to Cyvers CTO Meir Dolev, a Certik-associated address created a contract on the Coinbase Layer-2 network Base on May 24. This cast doubt on Certik’s claim that the vulnerability was discovered on June 5. Reportedly, the address is also testing OKX and Coinbase to see if there is the same vulnerability as Kraken.

Based on the community reaction, the general sentiment is that the action was not a Whitehat security research, with social media engagement citing on-chain evidence. Nevertheless, this did not derail CertiK’s Series B3 financing round, which garnered a stark $88 million.

Among the leaders in the funding round are Insight Partners, Tiger Global, and Advent International. Goldman Sachs, Sequoia, and Lightspeed Venture Partners also participated. Noteworthy, it marked CertiK’s fourth round of capital raised in nine months, totaling $230 million.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Related Topics:Auditor CertiK Criticized Krakens Loss Million

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Market

Ethereum Price Dip Causes Justin Sun $66 Million Loss

Published

9 mins ago

July 5, 2024

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Reports suggest that Justin Sun lost $66 million on Friday as Ethereum price dipped to levels last seen in February. Crypto markets continue to endure a sell-off, overshadowing optimism for a possible launch of spot ETH ETFs.

Multiple signals indicate that the Ethereum price may not slide much lower after the 10% crash on Friday despite elevated
fear levels.

Justin Sun Loses $66 Million on Ethereum Price Crash

Spot On Chain reported that the Tron Founder and Huobi Global advisor could have seen all the $58 million in profit accrued in the last five months go down the drain as the Ethereum price descended to $2,810 on Friday.

“Such a volatile market! Just 24 hours ago, he had a $58M profit from these ETH transactions; but now, it is already a $66M loss after the dump,” the report read.

Based on the report, Justin Sun acquired 361,000 ETH tokens between February and June, worth approximately $1.1 billion. Most transactions happened on Binance, where he recently transferred several DeFi tokens.

Justin Sun ETH Transactions revealed after Ethereum price drops — Justin Sun ETH Transactions. Source: Spot On Chain.

The breakdown of transactions within the five months that Sun bought ETH through Binance includes:

Bought 169,604 Ethereum (ETH) in February via “0x7a9” at an average price of $2,870
Bought 176,117 Ethereum (ETH) in April via “0x435” at an average price of $3,177
Bought 15,416 Ethereum (ETH) in June via “0xdbf” at an average price of $3,474

The three wallets often received ETH from Binance right after their stablecoin deposits.

The report comes only hours after his proposal to engage the German government to salvage its Bitcoin sell-off and minimize market impact. While the idea was noble, the offer stirred mixed reactions, with speculation of a possible market manipulation case.

“I believe that the German Government should reject Justin’s offer to buy the BTC via a private OTC transaction. That action, although noble sounding, would indeed be market manipulation, as well as, potentially lead itself to corruptive or unethical practices. This is where only people with the right contacts have access to these BTC and potentially at a less than market price. Also, nothing guarantees that the buyer won’t turn around and dump part of the holdings themselves,” Founder & CEO of Blockpliance Guillermo Fernandes told BeInCrypto.

Whether the German Government will take up Justin Sun on his offer remains unknown. Meanwhile, the market continues to endure bearish sentiment, with experts reporting extreme fear. According to Coinglass, over $104 million in ETH liquidations happened in the last 24 hours.

ETH Liquidations, after Ethereum price dipped — ETH Liquidations. Source: Coinglass

The crypto community’s eyes remain peeled on the week of July 15. According to Bloomberg analysts James Seyffart and Eric Balchunas, this is the revised timeline for possible ETH ETF launches as prospective issuers submit their amended S-1 forms. Nevertheless, Seyffart acknowledged “fairly low confidence in those launch date predictions.”

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Market

Cardano (ADA) Reaches Local Top, Poised to Decline Further

Published

1 hour ago

July 5, 2024

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During the intraday trading session on July 4, Cardano’s (ADA) Age Consumed metric rose to a 35-day high, suggesting that previously dormant tokens have begun to change hands.

This surge has since been followed by a decline in the altcoin’s price, signaling that a local top has been reached.

Cardano Long-Term Holders Are on the Move

On July 4, 1.32 billion ADA coins worth approximately $433 million at current market prices were moved, as indicated by the spike in its Age Consumed metric.

An asset’s Age Consumed metric tracks the movement of its dormant coins. The metric offers insight into the behavioral shifts of an asset’s long-term holders. This cohort of coin holders rarely moves their dormant coins around. Therefore, it is noteworthy when they do because it often precedes a shift in market trends.

The Age Consumed Metric can be a marker of a price bottom. This occurs when a spike in the metric’s value is followed by an asset’s price rally.

Conversely, it is also an indicator of a price top. This occurs when the metric spikes and the asset’s price falls. A price top refers to an asset’s highest price before a sustained decline.

At press time, ADA trades at $0.32. Its value has declined by 17% in the past 24 hours. For context, the altcoin traded at $0.39 when its Age Consumed surged. This price level represents its local top.

ADA’s daily trading volume has surged by 23% during the same period. This creates a bearish divergence between the coin’s price and trading volume, hinting at the possibility of a continued price decline.

Cardano Trading Volume Source: Santiment

In the past 24 hours, ADA’s daily trading volume has totaled $707 million.

ADA Price Prediction: The Current Downtrend is Strong

ADA has been on a downtrend since the beginning of July. At its current price, the altcoin trades at a low last seen in November 2023.

ADA’s Aroon Down Line is 100%, confirming the strength of the current downtrend. This indicator measures an asset’s trend strength and identifies potential trend reversal points. When its Down Line is close to 100%, the downtrend is strong, and the most recent low was reached relatively recently.

If the bearish bias towards the altcoin continues to gain momentum, ADA’s value may dip to $0.31.

However, if buying pressure spikes, it may push the coin’s price to $0.34.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Market

US Job Market Sees Growth in June as Crypto Market Slumps

Published

2 hours ago

July 5, 2024

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The US Bureau of Labor Statistics reported Friday that employers added 206,000 jobs in June. The unemployment rate rose slightly to 4.1%, above the estimated 4.0%, while average hourly earnings remained at 0.3% monthly.

Although this suggests that the US job market continues to experience healthy growth, there has been a muted response in crypto markets.

New Jobs Created Beats Analysts Estimate

According to the Bureau of Labor Statistics, the US economy added 206,000 jobs in June. While this represented a 6% decline from the 218,000 jobs added in May, it exceeded analysts’ forecasts of around 190,000 new positions.

US Nonfarm Payrolls | Source: TradingEconomics

During that month, unemployment rose slightly to 4.1%, a 2% hike from the projected 4.0%. Steadying at 4%, June’s unemployment rate suggested that the number of unemployed people as a percentage of the labor force remained stable.

Further, average hourly earnings increased by 0.3% in June, matching forecasts. This reflects steady, albeit slow, wage growth for US workers.

Crypto Markets Fail to React

While the report suggests the US job market continues to experience positive momentum, the cryptocurrency market has failed to react. Still declining as of this writing, the global cryptocurrency market capitalization has dropped by 6% in the past 24 hours.

Global Cryptocurrency Market Capitalization. Source: CoinGecko

The value of the leading crypto asset, Bitcoin (BTC), has plummeted by 3% during that period. At press time, BTC trades at $55,249.

Its price movements, assessed on an hourly chart, confirm the decline in trading activity despite the positive outlook offered by the Nonfarm Payrolls report.

As of this writing, the coin’s Relative Strength Index (RSI) is 40.76, resting below the 50-neutral zone. This indicator measures the asset’s overbought and oversold market conditions. At 42.49, BTC’s RSI shows that selling pressure currently dwarfs buying activity.

If this trend continues, the coin’s price may plummet further to exchange hands at $54,553.