Wemix denies cover-up amid delayed $6.2M bridge hack announcement

Wemix Foundation CEO Kim Seok-hwan said they had no intention of concealing a hack on its bridge, which led to over $6 million in losses.

In a press conference, Kim reportedly said there was no attempt to cover up the incident, even though the audience pointed out the announcement was delayed.

On Feb. 28, over 8.6 million WEMIX tokens were withdrawn due to an attack on the platform’s Play Bridge Vault, which transfers WEMIX to other blockchain networks. The company only made an official announcement four days after the attack. 

According to Kim, the announcement was delayed due to the possibility of further attacks and to avoid causing panic in the market because of the stolen assets. 

Related: Bank of Korea to take ‘cautious approach’ to Bitcoin reserve

Wemix CEO outlines risks of premature announcement

Wemix said the hacker broke into their system by stealing the authentication key for the company’s service monitoring system of Nile, its non-fungible token (NFT) platform. 

After the theft, the hacker spent two months preparing before randomly creating abnormal transactions. The hackers attempted to withdraw 15 times but only succeeded with 13 withdrawals, taking away 8.6 million WEMIX tokens and selling them in exchanges outside South Korea. 

Kim explained that upon becoming aware of the hack, they immediately shut down their servers and began their analysis.

The executive added that they filed a complaint against the unidentified hacker with the Cyber Investigation Team of the Seoul National Police Agency. The Wemix CEO said the authorities had already started investigating the matter. 

Kim said that there was a risk in making a premature announcement. The CEO said that in a situation where the penetration method was not identified, they could be exposed to further attacks. 

Kim also reiterated that the market had already seen some impact from the sold assets, and they would risk panic selling if they announced it immediately. 

During the press release, the executive apologized to Wemix investors, saying that the disclosure delay was his call and that he should be held responsible if anything goes wrong. 

WEMIX token drops 39% amid hack announcement

Despite the attempt to avoid causing market panic, the WEMIX token dropped by nearly 40% from the day of the exploit to March 4, when the company finally announced the hack. 

The price went from $0.70 on Feb. 27 to a low of $0.52 on Feb. 28. The price went down to $0.42 on March 4. At the time of writing, the crypto asset trades at $0.58, which is still 17% below its pre-hack price. 

Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express