Unocoin: BitGo’s corporate account freeze has taken effect as expected, and the multi-signature wallet backup mechanism is suspected to have been exploited.

Indian crypto exchange Unocoin has released an update stating it has obtained the required information and instructions from custodian BitGo. BitGo froze Unocoin’s corporate account in line with the platform’s directive on November 6, and the freeze appears to be operating as expected. Unocoin said the relevant transactions were directly signed and broadcast externally on-chain, with no involvement of or routing through BitGo’s platform. BitGo’s multi-signature wallet is equipped with a backup mechanism to allow fund withdrawals even if BitGo is unavailable, and this mechanism appears to have been exploited. The exchange noted it will continue investigating the specific mechanism behind the incident, crypto asset losses, and information privacy issues, and will resume services once the probe is complete. Earlier, after detecting suspicious and unauthorized activity on November 6, Unocoin had requested BitGo and Fireblocks to immediately freeze its corporate account; no crypto asset losses were identified at that time. On November 12, Unocoin reported detecting outgoing transfers from an ETH address in its BitGo wallet used to fund ERC-20 tokens, and had notified BitGo of the issue. However, the platform was unable to fully reconstruct the transaction at the time due to the account remaining frozen and the wallet’s use of change addresses.