BITPoint Exchange Hires Chainalysis to Track Stolen Funds

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BITPoint, the Japan-based cryptocurrency exchange that was hacked in July 2019, has announced that it was able to successfully trace the flow of stolen funds thanks to implementation of Chainalysis Reactor investigation software. The software allowed an unspecified amount of the stolen funds to be seized before they could be cashed out in another example of Chainalysis’ technology being used to thwart hackers.

Malware to Blame for BITPoint Hack

BITPoint saw 3.5 billion yen ($32 million) worth of cryptocurrencies were stolen during the hack, including BTC, BCH, and XRP. Initial investigations revealed that some 50,000 user hot wallets were compromised in the attack, representing around half of BITPoint’s entire customer base. This made up around 1.75 billion yen, with the remainder coming from company funds.

Hackers used malware to access hot wallet private keys in order to gain access to the funds, with BITPoint stating that there was “no evidence” that hackers had accessed their network using stolen passwords and user IDs and that “no leakage of user information” had occurred.

Chainalysis to the Rescue

Chainalysis Reactor was able to identify the stolen funds by tracing over one million transfers to their final destinations, where they could be converted to fiat. Chainalysis informed the companies at the end of the trail of the addresses that had received the stolen funds, with many taking action and freezing the funds. It is not revealed how much was cashed out by the hackers.

Chainalysis Reactor is Chainalysis’ investigation software that connects cryptocurrency transactions to real-world entities, empowering cryptocurrency businesses and law enforcement agencies to combat criminal activity such as fraud, extortion, and money laundering involving cryptocurrencies.

Chainalysis was involved in another high profile case this week when it was revealed that its technology was used to track the flow of funds from a malware hack on a Canadian insurance company, which has led to Bitfinex being ordered to freeze 96 by a UK court.