Indian cryptocurrency exchange Unocoin has suspended all services following a server breach, leaving customers unable to access their accounts as investigators examine unexplained transaction
Indian cryptocurrency exchange Unocoin has suspended all services following a server breach, leaving customers unable to access their accounts as investigators examine unexplained transactions involving its BitGo custody infrastructure.
The Bengaluru-based exchange detected unauthorized activity on November 6, followed by another intrusion on November 9 that prompted the shutdown. Although Unocoin initially maintained that no customer cryptocurrency had been lost, its November 12 security update acknowledged that the full extent of potentially unauthorized wallet transactions remains unknown.
More than 90% of customer cryptocurrency is held in cold storage, according to Unocoin, which is rebuilding its server infrastructure rather than attempting to restore the compromised systems. The process is expected to take four to five working days.
Unocoin requested emergency freezes on its enterprise accounts with Fireblocks and BitGo shortly after detecting the initial breach.
Fireblocks received the request at 11:24 UTC on November 6, followed by BitGo five minutes later. Both custody providers confirmed the restrictions, which were intended to prevent further transactions through the affected accounts.
However, Unocoin discovered outgoing transactions on November 12 involving an Ethereum address within its BitGo infrastructure that had been used to fund ERC-20 token transfers.
The transactions are now under investigation by BitGo, with their authorization, timing and total value yet to be established.
Unocoin cannot currently access its frozen BitGo accounts to review the activity. Its ability to reconstruct transactions independently is also limited by BitGo’s use of change addresses, which can complicate the tracing of assets across multiple wallets.
Consequently, the exchange has not established whether additional unauthorized transfers occurred or whether any customer holdings were affected.
The breach’s entry point and the potential exposure of customer information also remain unresolved.
The suspension has attracted further scrutiny after blockchain investigator Onchain Lens flagged approximately 81,000 addresses attributed to Unocoin on Arkham Intelligence that collectively displayed a zero-dollar portfolio balance.
The observation raised questions about the exchange’s reserves, although it does not establish that 81,000 customer wallets were drained.
Arkham’s tracking covers addresses identified as belonging to an entity and may not capture its complete custody infrastructure, particularly assets maintained through third-party custodians or unidentified cold-storage wallets.
Unocoin has not published a comprehensive reconciliation of customer liabilities against its current cryptocurrency holdings.
The exchange previously faced unauthorized wallet transactions in August 2017, temporarily suspending withdrawals after attackers exploited improperly secured access tokens captured in its error logs. It subsequently corrected the vulnerability and resumed operations.
The latest disruption follows CoinDCX’s acknowledgment of nearly $16 million in losses involving previously compromised deposit addresses, another incident that raised questions about cryptocurrency exchange custody controls in India.
Unocoin has not announced a firm reopening date. Customer logins, trading and withdrawals will remain unavailable while the company rebuilds its infrastructure, verifies balances with BitGo and Fireblocks, and completes security checks before restoring operations.
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