CoinStats Hacked, Loses $2M in Crypto Assets After Social Engineering Attack

On June 22, CoinStats, a crypto portfolio manager, halted its services after an attack on its wallets. Due to the firm's swift action, the hacker could only access 1.3% of all CoinStats wallets, carting away $2 million in crypto assets.

CoinStats, a crypto portfolio management service, has halted its operations following an attack on its wallets. The firm, which boasts over 5 million users, took the measure to prevent further theft after the incident, which affected 1,590 crypto wallets.

CoinStats CEO Narek Gevorgyan revealed the hack is connected to a social engineering attack, with the hacker deceiving a CoinStats employee into downloading malicious software on his computer.

“Our AWS infrastructure was hacked, with strong evidence suggesting it was done through a social engineering attack targeted at a CoinStats employee,” Gevorgyan tweeted on June 26.

In the context of the hack, social engineering is a widely used tactic that enables hackers to manipulate or deceive victims into granting them access to their computer systems.

Gevorgyan's tweet.Source: Twitter

CoinStats to Support Victims of Suspected Social Engineering HackFive days after the incident, Gevorgyan took to Twitter to share the discoveries of an internal investigation into the hack. The CEO said the hack resulted from a compromise of CoinStats’ AWS infrastructure, with evidence pointing towards a social engineering attack targeted at a CoinStats employee.

“What a week it’s been. I’ve been working diligently on CoinStats for the last 6 years. We’ve experienced many highs and lows, but I believe we’ve created the best portfolio tracker on the market,” Gevorgyan wrote in his tweet.

CoinStats CEO Narek Gevorgyan. Source: CoinStats

The CEO’s tweet did not directly mention refunding affected users. However, he noted that CoinStats regrets the incident and is discussing possible ways to support the hack victims.

Meanwhile, reports from community members reveal the recent hack resulted in greater losses than what CoinStats disclosed. According to a Wu Blockchain report, a wallet linked to Blurr.eth supposedly lost 3,657 MKR tokens, which are worth around $8.7 million.

Wu Blockchain noted that the hacker sold the stolen Maker (MKR) coins on the chain for 2,482 Ether. This token dump resulted in a 7% short-term price decline for MKR. However, CoinStats has yet to comment or accept the claims.

“A total of 1,590 CoinStats wallets were affected by the recent hack. The total drained amount from all the wallets is around $2m. The list of affected wallets has already been public for a while now,” Gevorgyan tweeted on June 23.

CoinStats CEO on the recent hack. Source: Twitter

CoinStats, which was founded in 2017, provides users with a platform to track their crypto portfolios across various exchanges and wallets. The service also offers features such as price alerts, market updates and NFT tracking.

In January 2023, CoinStats raised $2.2 million in a seed funding round led by IOSG Ventures and HashKey. The round also saw participation from Silicon Valley executives and天使投资人, including executives from Airbnb, DoorDash, Netflix and Zoom.

CoinStats planned to use the funds to expand its team, enhance its product offerings and launch new services for its users. The firm also aimed to integrate additional exchanges, wallets and NFT marketplaces into its platform.

Moreover, CoinStats intended to explore the development of new features such as crypto tax reporting, advanced portfolio analytics and integration with decentralized finance (DeFi) protocols.