OKX Sees $630 Million Exodus Amid Mounting Security Concerns as Users Flock to Binance

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As a researcher with a background in cybersecurity and experience in the cryptocurrency space, I find the recent developments at popular exchange OKX concerning. The mounting security concerns leading to over $630 million in outflows from OKX to Binance and other competitors is a clear sign that users are losing confidence in the platform’s ability to protect their assets.

Over the past week, more than $630 million worth of transactions have been withdrawn from OKX, a well-known cryptocurrency exchange. This exodus comes amid growing apprehensions about security, causing users to transfer their funds to Binance, the top cryptocurrency exchange in the market. The data indicates this trend.

Based on information from DeFiLlama, over the last 7-day span, OKX experienced approximately $633.8 million in withdrawals, whereas Binance recorded around $1.36 billion in deposits during the same timeframe. Notable competitors such as Bitfinex, Robinhood, Bybit, and Crypto.com reported outflows, while Huobi Global (HTX) and KuCoin witnessed minor inflows totaling $19 million and $1.8 million respectively.

According to BeinCrypto’s report, users are transferring their funds away from OKX due to two separate incidents where hackers successfully bypassed the two-factor authentication (2FA) protection for victims’ accounts. These cybercriminals allegedly gained unauthorized access through a risk notification sent via SMS, supposedly originating in Hong Kong.

A security specialist on microblogging platform X (previously referred to as Twitter) stated that after gaining unauthorized access, the hackers generated a fresh API key. This discovery has left investigators suspecting that the attackers subsequently exchanged the acquired funds for their personal benefit.

Two distinct victims encountered a currency account theft incident at a trading platform this morning, and surprisingly, the methods and some features of these incidents were similar, beyond the commonalities mentioned by @AsAnEgg. Notably, the suspicious messages regarding risk notifications originated from “Hong Kong,” while new API Keys with withdrawal and trading permissions were generated in each case.

— Cos(余弦)😶‍🌫️ (@evilcos) June 9, 2024

Security specialists at Dilation Effect uncovered a significant vulnerability in the cryptocurrency exchange: users have the ability to transition from Google Authenticator, a stronger verification method, towards less secure alternatives such as email or SMS authentication. This switch enabled hackers to circumvent users’ two-factor authentication safeguards.

Additionally, according to reports, OKX seems to be missing essential risk management features. In contrast to other platforms, OKX does not immediately enforce a 24-hour restriction on withdrawals when users perform sensitive actions such as disabling two-factor authentication or modifying login information.

Beyond approved addresses, withdrawals don’t undergo verification checks against set withdrawal limits, posing a risk for malicious actors to exploit such vulnerabilities. OKX has reassured users that they are probing the incidents and will be responsible for any financial losses if their platform is found to be at fault. However, the exchange hasn’t disclosed how it plans to address the particular security weaknesses pointed out by researchers.

⚠️ Essential Security Tips – Stay Safe! ⚠️

🚨 Be skeptical of unsolicited offers: Do your own research.

🔐 Secure your wallet: Keep your seed phrase safe.

🔍 Verify profiles: Likes & comments from OKX ≠ endorsement

— OKX (@okx) June 11, 2024

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2024-06-12 07:05