In the high-stakes world of digital assets, security breaches are a constant threat, but the story of recovery is often left untold. To shed light on this critical process, we sat down with Kofi Ndaikate, a leading expert in Fintech and cryptocurrency security. Following a recent high-profile hack, his team’s efforts have been instrumental in tracking and freezing stolen funds, turning a crisis into a case study for industry-wide collaboration. We discussed the sophisticated technology used to trace illicit transactions, the power of a global alliance in cornering attackers, and how incentivizing the white-hat community is creating a new paradigm in digital asset defense.
The article highlights your proprietary Automatic Tracking Service (OTS). Could you walk us through how this system first flagged the abnormal Solana-linked withdrawal? What specific on-chain metrics or patterns does it track that led to the successful freeze of the $1.77 million?
The OTS is essentially our digital bloodhound, constantly sniffing for anything out of the ordinary on the blockchain. It isn’t just looking for large movements; it’s analyzing behavior. In the case of the Solana-linked withdrawal, the system flagged a combination of red flags. The wallet had been dormant for a specific period, and the transaction was part of a complex chain designed to obscure its origin, a classic tactic we see attackers use. The OTS detected this abnormal pattern—the specific timing, the unusual destination addresses, and the method of transfer—and immediately triggered an alert. It was this early warning that allowed our team to act swiftly, investigate the chain of transactions, and ultimately coordinate the freeze of that $1.77 million before it could be laundered further.
You’re collaborating with global exchanges to blacklist addresses and freeze funds. Can you share an example of this process in action? Describe the key communication steps from when you flag a suspicious wallet to when a partner exchange successfully blocks a transfer from it.
Collaboration is everything in this space; no single exchange is an island. When our OTS flags a wallet and our asset tracking team confirms it’s tied to the stolen funds, a rapid response protocol kicks in. We immediately add the address to our internal blacklist and simultaneously disseminate it through a secure, shared channel with our global exchange partners. The communication is direct and urgent: “High-priority alert: address [address details] linked to confirmed illicit activity. Advise immediate freeze on any incoming transfers.” I remember one instance where our team traced funds moving toward a partner exchange. Within minutes of our alert, their compliance team responded, confirming they had flagged the destination account and frozen the assets the moment they landed. It’s a testament to the trust and real-time cooperation we’ve built across the industry.
Your 10% recovery reward program is a compelling incentive for security experts. What has the initial response been from the white-hat community, and what is the step-by-step process for a contributor to securely submit their findings and claim their portion of recovered funds?
The response has been incredibly positive. The white-hat community sees it not just as a financial incentive but as a formal acknowledgment of their value in securing the ecosystem. It essentially deputizes the best minds in the field to become our allies. The process is designed for security and clarity. A contributor, whether a blockchain analyst or a white-hat hacker, can submit their intelligence through a dedicated, encrypted portal. Our team then validates the lead. If their information directly leads to the freezing and successful recovery of stolen assets, the contributor is entitled to 10% of that recovered amount. It’s a straightforward, powerful partnership that broadens our surveillance and recovery capabilities exponentially.
Upbit covered the $26 million loss while citing an internal vulnerability. Beyond the wallet system replacement, what specific procedural or team-based security enhancements have you implemented since the hack? Please share some concrete examples of how your daily security operations have changed.
Covering the customer losses was our first and most important commitment, but the real work came afterward in hardening our defenses. Replacing the wallet system was just the start. We fundamentally overhauled our internal procedures. For example, we’ve implemented stricter, multi-layered approval protocols for any movement of corporate assets, so there’s never a single point of failure. Our daily security operations are now far more proactive; we’ve integrated continuous, automated penetration testing and adversarial simulations where our own team tries to find new vulnerabilities. It’s a shift from a defensive posture to what we call “active defense,” constantly hunting for threats before they can be exploited.
Your asset tracking team’s round-the-clock monitoring was crucial in this recovery. Could you describe a specific breakthrough moment the team experienced while tracing the stolen assets? What was the key piece of data or insight that led to a successful freeze?
The team was working tirelessly, sifting through thousands of transactions. The breakthrough didn’t come from one massive discovery but from spotting a tiny, seemingly insignificant mistake made by the attacker. They were using a sophisticated mixing service to try and launder the funds, but in one small transaction, they accidentally consolidated funds into a new wallet that had a faint, residual link to a previously known bad address from a completely different incident. It was a needle in a haystack. That single link allowed us to unravel a whole new web of their wallets and predict where a larger chunk of funds was headed next. We were able to get ahead of the attacker, alert the destination exchange, and have them waiting to freeze the funds on arrival. The atmosphere in the room at that moment was electric; it was the validation of hours of painstaking work.
Do you have any advice for our readers?
Absolutely. Security is a shared responsibility. While exchanges like ours invest heavily in protecting the platform, individual users are the first line of defense for their own accounts. My advice is to be relentless with your personal security hygiene: use strong, unique passwords, enable two-factor authentication on every platform, and be incredibly skeptical of unsolicited emails or messages. Understand that the same persistence our team uses to track stolen funds is used by attackers to find a way into your account. By staying vigilant and leveraging the tools we provide, you help fortify the entire ecosystem. Every secure account makes the network stronger for everyone.
