Rain Exchange Hit by $14.1 Million Crypto Exploit, Reveals On-Chain Analyst ZachXBT
In a startling revelation, the Rain cryptocurrency exchange appears to have been the target of a significant exploit, resulting in the unauthorized transfer of approximately $14.1 million in various cryptocurrencies. The incident, which took place on April 29, was brought to light by on-chain analyst ZachXBT on May 13. According to the analyst’s findings, the exploit involved suspicious transactions from Rain’s wallets for Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP, marking a concerning security breach for the Bahrain-based exchange.
What is Rain Exchange?
Rain is a cryptocurrency exchange founded in 2017 and headquartered in Bahrain. It is tailored primarily for users in the Middle East and North Africa (MENA) region. Rain is regulated by the Central Bank of Bahrain (CBB) and the Abu Dhabi Global Market (ADGM), ensuring compliance with local financial regulations.
Rain offers a platform for trading over 70 different cryptocurrencies, including major ones like Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
Security is a critical aspect of Rain’s operations. The exchange employs bank-grade security protocols and proprietary cold storage systems to safeguard users’ assets. It also features two-factor authentication (2FA) and SSL encryption for secure data transmission. Regular audits by third-party security firms are conducted to ensure the safety of the platform.
Rain supports multiple local currencies from the Middle East, including the Bahraini Dinar, Saudi Riyal, and UAE Dirham, among others. This feature allows users to trade cryptocurrencies using their local currencies, enhancing accessibility and convenience.
Details of the Exploit
ZachXBT, who shared the details of the exploit via their Telegram channel, noted that the suspicious outflows were quickly moved to instant exchanges, where they were exchanged for Bitcoin and Ethereum. The funds were then transferred to two distinct addresses on the Bitcoin and Ethereum networks. The Ethereum address, identified by its suffix “6c28,” currently holds around 1,881 ETH, valued at approximately $5.5 million. Meanwhile, the Bitcoin address, ending in “prp2,” has not disclosed its holdings.
Rain Exchange, a centralized platform serving customers primarily in Southwest Asia and the Middle East, has facilitated over $1 billion in trading volumes since its inception. The exchange, which recently received approval from Abu Dhabi’s financial regulator to operate as a virtual asset brokerage and custody service provider, has seen its “pro” version intermittently down since May 5, raising further concerns among its users.
Broader Implications and Previous Allegations
This incident is not isolated in the realm of cryptocurrency exploits and comes amidst other significant claims made by ZachXBT. The analyst has previously alleged that North Korea’s Lazarus Group laundered $200 million worth of cryptocurrency into fiat currency over a four-year period. Furthermore, ZachXBT’s analysis pointed out that at least $44 million worth of stolen crypto had been laundered through Paxful and Noones, using two usernames, “EasyGoatfish351” and “FairJunco470,” which exhibited suspicious deposits and trading volumes.
The exploit of Rain Exchange underscores the ongoing challenges and risks associated with securing digital assets in the rapidly evolving cryptocurrency market. As exchanges and users grapple with these threats, the incident serves as a stark reminder of the importance of robust security measures and vigilant monitoring to safeguard against unauthorized access and potential financial losses.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
