Kyrgyzstan’s Four Dragons Exchange Reports Security Breach
The cryptocurrency exchange Four Dragons from Kyrgyzstan confirmed a security breach and asset theft. The incident occurred on February 22.
The team described the financial loss as “significant,” without specifying exact figures.
According to the Telegram channel “Mendeleevshina”, the amount involved is $841,000. Meanwhile, “VChK-OGPU”, citing unofficial sources, suggests the figure exceeds $100 million.
Four Dragons stated that the security breach and theft will not affect its commitments to clients and partners.
“Operational activities continue as usual, despite the loss of some liquidity,” the statement reads.
During the investigation, the stolen funds were traced to 17 Bitcoin wallets.
According to “Mendeleevshina”, all these wallets belong to the Ukrainian exchange WhiteBit.
In a comment to ForkLog, WhiteBit representatives denied this claim:
“None of the mentioned 17 Bitcoin wallets belong to WhiteBIT. Moreover, it was WhiteBIT that provided Kyrgyz law enforcement with information on these addresses, to which the stolen USDT was allegedly converted, according to the victim.”
WhiteBit added that the information they provided was passed on by law enforcement to the affected exchange and other AML providers for further tracking.
Experts from the analytical company Crystal Blockchain told ForkLog that all identified wallets appear to be personal addresses not linked to any online service.
Representatives of Four Dragons are taking “maximum measures to ensure these funds cannot be used.”
They also offered 10% of the recovered amount to anyone who helps locate the stolen funds under conditions of anonymity.
Meanwhile, the cyber police of Kyrgyzstan are conducting their own investigation into the breach.
The platform provided ForkLog with a comment on the situation.
In July 2023, the Four Dragons exchange received a license to operate as a virtual asset exchange operator from Kyrgyzstan’s financial regulator. According to media reports, the platform also has offices in Armenia and Kazakhstan.
Since August 2022, Kyrgyzstan has enforced a law “On Virtual Assets,” outlining requirements for participants in the crypto market.
A separate document mandates trading platforms to operate as public joint-stock companies and register in the Unified State Register of Crypto Exchanges.
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