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Poloniex’s $126M Security Breach Triggers FCA Warning

UK's FCA warns against Poloniex after $126M crypto breach, highlighting growing concerns in the crypto sector.
Poloniex’s $126M Security Breach Triggers FCA Warning

The Financial Conduct Authority (FCA) of the United Kingdom has recently issued a stark warning regarding the crypto exchange Poloniex. Owned by entrepreneur Justin Sun, Poloniex is under scrutiny after suffering a significant security breach, resulting in a loss of $126 million. The FCA’s warning, highlighted on their website on December 6, draws attention to Poloniex operating without authorization in the UK, a situation raising eyebrows within the financial community.

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Repeated Security Breaches Raise the Alarm

Poloniex, a Seychelles-based exchange, is one of many Sun-affiliated platforms that face security challenges. In the past two months, Sun’s associated firms have experienced four significant hacks, causing concern across the cryptocurrency sector. 

These incidents include an $8 million loss at HTX in September and a $30 million hit from a hot wallet breach in late November. These repeated security breaches underscore the vulnerabilities present in the digital asset space.

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Poloniex’s Restoration Efforts and Future Plans

Following the substantial hack on November 10, Poloniex has been actively working on restoring its platform. By the end of November, they had primarily completed these efforts and were preparing to resume deposits and withdrawals. As of December 5, Poloniex reinstated these services for selected cryptocurrencies through the Tron network, suggesting a phased approach to full operational capacity. This move signifies a step towards normalcy, yet the shadow of recent events lingers.

The FCA’s decision to add Poloniex to its warning list amidst a broader regulatory crackdown on unauthorized financial services in the UK. Since 2020, the FCA has received 291 applications from crypto companies for registration, approving only 38. 

Including 140 crypto companies, including HTX and KuCoin, on its warning list in October reflects a tightening regulatory landscape. Amid these developments, Poloniex’s recent woes stand as a reminder of the importance of stringent security measures and regulatory compliance in the ever-evolving world of cryptocurrency.

Read Also: XRP Ledger Welcomes Inheriti for Enhanced Asset Inheritance

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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