Lykke cryptocurrency exchange has confirmed a security breach that led to the loss of $22 million in crypto assets, prompting a halt on all withdrawals as a precautionary measure.

On June 10, Lykke cryptocurrency exchange announced via social media that it had temporarily suspended withdrawals following a cyberattack that drained $22 million from its wallets on June 4. The exchange reassured users that their funds "are safe and will be recovered."

Both Lykke UK and Lykke Corp AG were affected by the breach. In a subsequent post, the exchange clarified that withdrawals had been paused to prevent further potential losses.

Launched in 2015 and based in Switzerland, Lykke is a centralized cryptocurrency exchange known for its "no fee" trading model and origins as a prominent forex broker.

Blockchain security researcher SomaXBT claimed to have uncovered the exploit on June 9, accusing the Lykke team of attempting to conceal the breach. "Lykke CTX got exploited and lost $19.5 million worth of crypto assets but the team is still trying to hide this fact," SomaXBT stated. They supported their claim with a screenshot of a Discord message from the Lykke team, which described the incident as "unscheduled full system maintenance."

The day before the announcement, a Lykke user expressed frustration on social media platform X, citing operational issues and rumors of a hack.

In their June 10 statement, Lykke apologized for the inconvenience and concern caused by the attack, emphasizing that the exchange's "solid capital reserves and a diverse portfolio" would cover any potential losses, ensuring client funds remain safe. The exchange also revealed that it had identified the IP addresses of the attacker, which would aid in a criminal investigation. A cybersecurity team has been engaged to block and recover the stolen assets.

This incident adds to a series of unacknowledged exploits against centralized exchanges. On April 19, on-chain investigator ZachXBT reported a $14.1 million hack of the Rain exchange that had occurred two weeks prior. Rain later confirmed the attack, assuring customers that no funds were lost as the exchange covered the losses from its reserves.

Lykke's prompt acknowledgment and measures to address the breach reflect ongoing challenges and the critical importance of robust security protocols in the cryptocurrency exchange sector.