Trading company Kronos loses $25 million: unauthorized API trading cited

The Taiwan-based trading company Kronos announced on the morning of 11/19 that around 3 a.m. on the same day, its API key was unauthorizedly used. The company has halted trading for investigation. Kronos stated that the amount of loss was not significant and they expect to resume trading soon.

Chainalysis: Kronos Lost $25 Million

According to Chainalysis investigator ZachXBT, Kronos, a wallet service by KeyFi, has had over 13,000 ETH transferred out, resulting in a loss of over $25 million.

Some netizens find it surprising that some claim the loss for Kronos is "not significant."

Sorry should be $25M not $20.3M****

— ZachXBT (@zachxbt) November 18, 2023

Evening Update: Kronos Losses Totaling 26 Million Euros, Will Fully Compensate

Kronos by KeyFi announced on the evening of 11/19 that the total confirmed losses amount to approximately 26 million Euros. Despite the substantial amount, Kronos is operating well and will compensate for the losses internally without causing harm to any partners.

2/ At present, we can confirm that the losses are about $26 million in crypto assets, and despite it being a sizable amount, Kronos remains in good standing. All losses will be covered internally, no partners will be affected.

— Kronos Research 🟠 (@ResearchKronos) November 19, 2023

WOO X: User Funds Secure, Trading Resumed

WOO X, associated with Kronos by KeyFi, stated that although Kronos is its largest liquidity provider, it does not affect the security of user assets.

Due to Kronos Research being the main liquidity provider in its spot market and accounting for 40% of the liquidity in the perpetual contract market, trading was temporarily halted to prevent user positions from being compromised due to insufficient liquidity. WOO X has now resumed trading by collaborating with other market makers.

At the time of submission, both the perpetual contract and spot markets of WOO X have gradually resumed trading. The platform is also addressing customer service issues and allowing users to withdraw funds.

Status update
– First and foremost, all client assets are safe
– TLDR our largest liquidity provider Kronos Research recently experienced a hack that caused them to pause all trading on WOO X
– Since Kronos Research is the primary liquidity provider for spot markets and around… https://t.co/sDR8QHvmZC

— WOO X (@_WOO_X) November 18, 2023

Former Kronos Engineer at KeyFi Involved in Internal Sabotage in 2020

In 2020, two engineers, surnamed Chen and Hsu, at Kronos, a Taiwanese cryptocurrency exchange under KeyFi, embedded programming errors in trading and analysis programs due to not receiving bonuses as agreed, resulting in the company making inappropriate trades at incorrect times, leading to continuous erroneous trades and losses of about $1.4 million, exceeding 40 million New Taiwan Dollars.

After being sued, both admitted to part of the offenses. Chen received a sentence of 1 year and 4 months, with eight months commutable to a fine of 240,000 New Taiwan Dollars, while Hsu was sentenced to 10 months, with a fine of 300,000 New Taiwan Dollars. The former engineers at Kronos by KeyFi manipulated trading programs, sentenced to 1 year and 4 months in prison.