Unocoin keeps deposits and withdrawals halted over suspect transfers

Unocoin said the transfers were signed outside BitGo’s platform while its account was frozen, possibly via a wallet recovery feature.

Indian cryptocurrency exchange Unocoin has kept deposits and withdrawals suspended as it investigates whether suspicious transfers from wallets linked to custodian BitGo were made using a recovery feature.

On Friday, the exchange said that BitGo had frozen the exchange’s enterprise account on Nov. 6 at Unocoin’s request and that the freeze worked as intended. The transactions under investigation were signed and broadcast outside BitGo’s platform, Unocoin said.

The exchange said BitGo’s multisignature wallets include a recovery feature that lets wallet holders access funds if BitGo becomes unavailable. Unocoin suspects the feature was misused and has yet to establish how the transfers occured or whether it lost any digital assets.

Unocoin and BiGo did not respond to Cointelegraph’s request for more information before publication.

Unocoin first the unauthorized activity on Nov. 6 and suspended all services on Monday after detecting further activity. On Thursday, it disclosed outgoing transactions from an Ethereum address in its BitGo wallet infrastructure and said its servers had been compromised.

The exchange has not announced a date for restoring services.

A Nov. 5 warning from India’s cybersecurity agency described an AI-assisted campaign targeting crypto exchanges and other financial firms. No connection to Unocoin’s incident has been established.

Related: India plans first tokenized bonds using wholesale CBDC: Report

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