According to Cointelegraph, the Indian cryptocurrency exchange Unocoin has sustained a complete halt on all deposits and withdrawals as it investigates irregular transaction activity linked to its BitGo custodial account. The exchange confirmed that unauthorized transfers were executed outside of BitGo’s standard platform interface while the associated account was already frozen. This anomaly suggests that the suspicious movements may have been facilitated through a wallet recovery feature, bypassing standard security protocols.
The exchange emphasized that these transactions occurred without proper authorization, raising significant concerns about the integrity of the custody arrangement. By identifying the method of execution as a recovery feature rather than a direct platform transfer, Unocoin has highlighted a potential vulnerability in how account access is managed during security lockdowns. The firm stated that it is actively cooperating with relevant authorities to trace the origin of these funds and determine the extent of the unauthorized access.
As a direct result of this incident, all user funds remain inaccessible for withdrawal or deposit. Unocoin has assured its customer base that the safety of assets is the primary objective, though the freeze remains in effect until the investigation concludes. The exchange noted that it is working to resolve the technical and security issues that allowed the recovery feature to be exploited during the account freeze. Until further notice, traders and investors on the platform must wait for official updates regarding the resumption of normal financial operations. This situation underscores the ongoing challenges within the cryptocurrency sector regarding custodial security and the necessity for robust multi-factor authentication systems to prevent similar exploits in the future.
