UAE-based Crypto Exchange M2 Fully Reimbuses Affected Customers from Nearly $14M Hack

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As a researcher with over a decade of experience in the ever-evolving world of cryptocurrencies, I find myself both intrigued and concerned by the recent hack on M2, a global exchange that has made significant strides in a relatively short timeframe. The loss of $13.7 million from hot wallets is a stark reminder of the inherent risks associated with digital assets, even those backed by billions of dollars and tied to major financial institutions.

In a recent announcement, M2, a cryptocurrency exchange based in the United Arab Emirates and established in 2022, disclosed that three of its active wallets had been hacked, resulting in a total loss of approximately $13.7 million belonging to customers. As per ZachXBT, a well-known on-chain security expert, the attacker managed to steal over $10 million worth of Ethereum (ETH) and around 41 Bitcoins (BTC), valued at roughly $3 million and $69,753 respectively, from M2’s hot wallets.

In addition to the M2 exchange hacker making off with some tokens (worth approximately $166.4 each), these tokens have already been converted into Wrapped SOL. This young cryptocurrency platform, operational in more than 150 countries, promptly took action to restore its trading services smoothly and efficiently.

“We would like to report that the situation has been fully resolved and customer funds have been restored. M2 has taken full responsibility for any potential losses, demonstrating our unwavering commitment to safeguarding our customers’ interests. All services are now fully operational with additional controls in place,” the M2 team reported.

The M2 group has shared that they’re collaborating with appropriate law and rule-making bodies to handle the situation correctly. Additionally, a significant amount of cryptocurrency thefts can be attributed to oversights within the organization, resulting in sensitive data breaches.

Closer Look at the M2 Exchange and Recent Hack

Due to the thief exchanging the stolen resources from lesser-known cryptocurrencies like Dogecoin (Shiba Inu), there’s a much higher likelihood that the money will be washed or anonymized using platforms like Tornado Cash or other cryptocurrency tumblers.

💼 Fund Distribution:

— Hacken🇺🇦 (@hackenclub) November 1, 2024

Furthermore, much like other platforms, instances where funds ended up in Tornado Cash occurred with WazirX, an Indian exchange. Fortunately for M2 customers, the company compensated them by returning their deposited funds.

In the past, significant backing for the M2 exchange has come from prominent investors, with Mr. Wonderful, Kevin O’Leary, being one of the key figures.

In simpler terms, “Crypto outlaws are a thing of the past. The M2 exchange in Abu Dhabi, which is regulated, boasts backing from billions of dollars, and is associated with major financial giants, is what this sector has been longing for,” as per O’Leary’s earlier remarks.

Nonetheless, O’Leary’s endorsement raises some doubts since he previously had a close association with the now-defunct FTX cryptocurrency exchange. It’s worth noting that M2 exchange seems to maintain relationships with the United Arab Emirates government.

In other words, it’s been supported by H.E Tareq Abdulraheem Al Hosani, the chairman of the Phoenix Group Board and also the leader in charge of purchasing for the military and police forces of the United Arab Emirates (UAE), specifically Abu Dhabi.

As a researcher, I’ve come across the M2 Cryptocurrency Exchange’s flagship product, M2 Earn, that promises an attractive annual return of 11.5% on USDT and 10.5% on Bitcoin to its clients. However, some industry experts caution that these yields might be associated with relatively high risks.

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2024-11-01 18:54