Unocoin Suspends Operations Amid Investigation into Suspect Crypto Transfers

Indian cryptocurrency exchange Unocoin has kept its deposits and withdrawals suspended while investigating whether suspicious digital asset transfers from wallets linked to its custodian, BitGo, were executed using a recovery tool. The platform initially noticed unauthorized activity on November 6 and subsequently halted all services on Monday following the detection of further activity. On Thursday, the firm disclosed outgoing transactions originating from an Ethereum address within its BitGo wallet infrastructure, adding that its servers had experienced a compromise.

According to the exchange, BitGo had frozen Unocoin's enterprise account on November 6 upon the platform's request, and that freeze functioned as intended. However, the transactions currently under review were signed and broadcast externally outside of BitGo's platform. BitGo's multisignature wallets feature a backup recovery option designed to give wallet holders access to their funds if the custodian becomes unavailable. Unocoin suspects that this recovery capability may have been misused, though it has not yet determined how the transfers occurred or whether any digital assets were permanently lost. Following these developments, users searching for unocoin news have found that the exchange has not yet announced a specific date for restoring full services.

Unocoin has halted all deposits and withdrawals while investigating unauthorized transactions connected to its custodial wallets.

In a related context, a warning issued on November 5 by India's cybersecurity agency detailed an AI-assisted campaign targeting digital asset platforms and other financial institutions. However, no direct connection between that advisory and the Unocoin incident has been established. Representatives for Unocoin and BitGo did not respond to requests for further information prior to publication.

Why it matters

The ongoing service suspension at unocoin affects traders and users who rely on the platform for digital asset transactions in India. The situation highlights potential vulnerabilities involving third-party custody solutions and recovery mechanisms, drawing attention to security practices across the broader cryptocurrency sector.