Unocoin keeps transfers suspended as probe examines externally signed wallet activity

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Unocoin suspends transfers for probe

Highlights

Unocoin suspended its services after detecting unauthorized activity on Nov. 6 and further suspicious activity on Nov. 9.
The transactions under investigation were signed and broadcast externally rather than processed through the custodian’s platform.
Unocoin is rebuilding its server infrastructure but has not provided a date for restoring deposits and withdrawals.

Unocoin investigates unauthorized wallet activity

As reported by Cointelegraph, Unocoin is keeping deposits and withdrawals halted while it investigates unauthorized activity involving its systems and cryptocurrency wallets.The exchange first detected suspicious activity on Nov. 6 and asked its custody providers to freeze the enterprise accounts used to manage daily balances. After identifying further unauthorized activity on Nov. 9, Unocoin suspended its services while it assessed the extent of the incident.On Nov. 12, the exchange disclosed outgoing transactions from an Ethereum address used to fund ERC-20 token operations. It also said its servers had been compromised, although the full scope of the incident and any potential losses remain under investigation.Unocoin later said the transactions were signed and broadcast externally on-chain rather than initiated through BitGo’s platform. The enterprise-account freeze requested by Unocoin remained active and operated as intended.In a clarification provided to Traders Union, BitGo said its systems were not breached. According to the custodian, the transactions were independently signed using the user and backup keys held by Unocoin and broadcast without BitGo’s participation. A platform-level freeze can restrict activity initiated through BitGo but cannot prevent transactions independently signed with keys held outside its platform.It has not yet been publicly established how the relevant keys were accessed.

Infrastructure rebuild delays service restoration

Unocoin says it is rebuilding its server infrastructure from scratch instead of restoring the compromised systems. The exchange previously estimated that the process could take four to five working days, but it has not announced a firm date for resuming deposits and withdrawals.

According to Unocoin, more than 90% of customer crypto assets are held in cold storage. The exchange continues to work with its custody and infrastructure providers to verify wallet balances, determine the extent of any exposure and restore services safely.

The incident highlights the operational risks associated with client-controlled signing keys, infrastructure security and service continuity, even when account-level controls at a custody provider remain active.

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

The Unocoin incident echoes recent disruption at Mercado Bitcoin, which began restoring fiat transfers after a $49 million hack while keeping crypto withdrawals suspended.

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