Hacked Livecoin announces start of user fund reimbursements

Representatives of the cryptocurrency exchange Livecoin, which was hacked at the end of December 2020, said they were ready to begin reimbursing users’ funds.

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Assets will be reimbursed first to clients with small balances — up to $5,000. Funds will be paid in full and customers will incur no losses, Livecoin assured.

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“Some assets remained untouched; we will pay them in native form. The lost assets will be paid in stablecoins at the rate at the time of the hack,” the statement said.

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To determine each client’s balance, the exchange will not count trades conducted during the attack; where they occurred, Livecoin will reverse the trades and return funds.

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After processing all applications, which will close on 17 March 2021, the exchange will begin disbursing to the remaining clients with medium and large balances.

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“We cannot do this until all verification applications are processed, as we need to have an exact figure of verified client balances, between which all remaining funds will be distributed proportionally,” the team explained.

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The exchange reserves the right to rebalance unclaimed balances from various altcoins into stablecoins and distribute them among verified clients.

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“For example, if we have 100 coins in a given native token, but only 30 coins are required for payouts to verified clients, the remaining 70 coins will be rebalanced into USDT and distributed among the verified clients,” Livecoin explained.

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Clients were asked to use well-known file-sharing services or cloud services to submit documents; otherwise Livecoin will not accept the verification application for consideration:

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“If any exploits or malware are found in the submitted document, we will reject the verification application without the possibility of appeal. This also applies to already submitted applications.”

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Originally the platform set the payout start for 17 March 2021, but later moved it to an earlier date to reassure clients of its intentions and encourage them to submit verification requests without fear.

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As of December 24, 2020, the price of Bitcoin on the Livecoin exchange surged to several hundred thousand dollars, and withdrawals from the platform became unavailable.

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Director Svetlana Geller also deleted her Telegram account. Users speculated that the platform’s founders committed an exit scam.

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Soon on the main page of the site appeared a message that the exchange had undergone a \”thoroughly planned attack,\” and that the administration had completely lost control over the servers, backend and nodes.

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Unknown persons stole 106 BTC, 380 ETH, 236 BCH, 567 012 XRP, 66.8 million DOGE, 56,000 USDT, and an unnamed amount in ERC-20 tokens.

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All Ethereum-denominated funds stolen were transferred to the DAI stablecoin via the Uniswap contract. The stolen XRP coins ended up on the KuCoin exchange.

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On January 3, representatives of Livecoin announced the move to a temporary domain Livecoin.news and noted that they had partially regained access to media channels. However the sole confirmation that the site is related to the exchange is a post on Twitter.

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On January 16 the exchange announced its closure and decided to pay out the remaining funds to users. However clients were outraged by the excessive verification requirements. In addition to scans of documents, the platform requested a video file showing the transaction ID of the first deposit, the person’s face, a passport, and an oral confirmation of the full name, date and legality of the origin of funds.

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The initiative group of the Russian-speaking Livecoin user community advised against rushing to submit documents, as unknown individuals behind the mailing could steal confidential information.

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They presented counter-requests to the exchange administration: with a chronology and reasons for the hack, explanations for the cessation of the platform’s legal registration, and data on trading volumes.

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