Kraken Claims Extortion After $3M Bug Exploit
Kraken, a major cryptocurrency exchange, has reported a security breach resulting in the loss of $3 million worth of digital assets. The incident involved a self-proclaimed security researcher who identified a critical bug that allowed users to artificially inflate their account balances. Initially, the researcher demonstrated the flaw with a $4 crypto transfer, which would typically qualify for Kraken’s Bug Bounty program. However, two accounts associated with the researcher exploited the bug to withdraw substantial funds from Kraken’s treasury.
Nick Percoco, Kraken's Chief Security Officer, described the actions as extortion rather than ethical hacking. The perpetrators refused to provide a full account of their activities or return the stolen funds, despite being asked by Kraken. The company is treating the incident as a criminal case and is coordinating with law enforcement agencies to address the breach. Kraken has reaffirmed its commitment to its Bug Bounty program, emphasizing its role in enhancing the overall security of the crypto ecosystem.
