Kronos Research, a prominent market maker, trading firm, and venture capital fund based in Taipei, fell victim to a significant security breach resulting in unauthorized access to its API keys. The breach, disclosed on Sunday, November 19, via a post on social media platform X (formerly Twitter), led to the loss of a substantial amount of crypto funds.
In response, Kronos Research has temporarily ceased all trading operations to conduct a thorough investigation into the incident.
The extent of the breach was highlighted by on-chain investigator ZachXBT, who tracked the outflow of funds and estimated Kronos’ losses at over $25 million in Ether. Subsequently, the company confirmed in a follow-up post on X that the total losses amounted to approximately $26 million in various crypto assets.
Despite the substantial financial setback, Kronos assured in its initial announcement that the potential losses do not represent a significant portion of its equity. In a subsequent update, the trading firm reassured stakeholders that all losses would be covered internally, emphasizing that no partners would be adversely affected.
While Kronos Research has not provided a timeline for resuming its operations, the company expressed its commitment to restoring trading activities as swiftly as possible.
The $26 million attack on Kronos Research stands as the third-largest crypto theft in November 2023. Earlier in the month, data from blockchain security firm Certik revealed that crypto attacks had already accounted for approximately $173 million in losses, with the most notable incident being the $113 million hack of Poloniex.
Impact on WOO X and Trading Resumption
Beyond affecting Kronos Research, the security incident also prompted a temporary pause in operations for WOO X, an exchange where Kronos serves as the market maker for spot and perpetual futures markets. WOO X officially acknowledged Kronos’ security situation in a statement on the X platform and announced a temporary trading halt to protect users’ positions amid a potential lack of liquidity. The exchange, however, reassured users that all customer funds remained secure.
As of the latest update, WOO X has resumed trading in both spot and perpetual futures markets. The exchange stated that clients can now initiate withdrawals for all assets. Despite this, WOO X has faced criticism from the online crypto community, with some questioning its relationship with Kronos and demanding more clarity.