The Zilliqa blockchain foundation has asked exchanges to pause ZIL deposits and withdrawals after an exchange partner’s cold wallet was compromised in a suspected private key theft, the project announced Friday. The amount stolen has not been disclosed, but on-chain data shows multiple large outflows from a wallet tagged as a partner exchange custody address beginning late Thursday.
Zilliqa said it was notified by the affected exchange — which it declined to name — that an attacker gained access to cold storage credentials and moved funds to multiple destination addresses. The foundation said it is working with blockchain analytics firms and law enforcement to trace the stolen assets and has shared indicators of compromise with major exchanges to flag and freeze related deposits.
The incident highlights persistent custody risks even for institutions using cold storage, where private key management practices rather than protocol vulnerabilities are often the weak link. Zilliqa emphasized that the Zilliqa mainnet itself was not compromised and that user funds held in non-custodial wallets remain unaffected.
Major exchanges including Binance, KuCoin, and Gate.io have confirmed they have suspended ZIL deposits and withdrawals pending further notice. Trading of ZIL pairs remains active on most platforms. The ZIL token dropped approximately 8% on the news before recovering some losses as traders assessed the containment efforts. As reported by Cointelegraph.
