At the beginning of June, a USD 22 million hack of the Zug-based crypto exchange Lykke shook the Crypto Valley. The platform has been offering crypto services to customers in Switzerland and abroad for almost a decade. Lykke must now take responsibility for the "catastrophe", says founder Richard Olsen in an interview with CVJ.CH.
Lykke was one of the first blockchain companies in Crypto Valley. Originally born out of a forex broker, the trading platform tackled the then young crypto market in Zug in 2015. The plan: a comprehensive platform for everything to do with blockchain-based assets. The already successful entrepreneur Richard Olsen wanted to bring trading, custody, staking and other services under one roof with Lykke. After a few bumpy years, the business finally gained traction. Preparations were made for new product launches. The recent incident that led to the loss of USD 22 million in cryptocurrencies made correspondingly big waves in Zug's crypto valley.
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A sophisticated attack
In an interview with CVJ.CH, Olsen explains how this downright catastrophe for the company came about. On the fourth of June, an attacker gained unauthorized access to Lykke's company network. He was able to convince one of the partner companies to transfer cryptocurrencies worth over USD 22 million to the hacker's own wallet. No alarm bells rang there. However, Olsen characterizes the attack as highly sophisticated - without a single responsible party. The exact details will soon be published in an incident report.
According to the founder, all the facts must now be put on the table and communicated honestly with the customers affected. The incident was a disaster that served as a wake-up call. After the hack, Lykke examined and revised all systems. After all, such a "rookie mistake" should never happen again. Rebuilding trust is now the top priority.
"Customers will not suffer any losses"
Lykke is now working on getting the trading platform up and running as quickly as possible. This will allow customers to manage and close their positions again. The next step is the opening of withdrawals. The exchange has been completely closed for two weeks. It remains unclear how long this maintenance process will take. However, the entrepreneur has a detailed compensation plan in mind. Despite the hole in the balance sheet, no customer will be harmed by this incident.
Olsen is backed by a competent team with in-depth expertise in a wide range of areas, from blockchain and regulation to finance and wholesale. This team is also fully motivated to turn the incident into a success story. It has the capacity to offer a wide range of crypto services in-house. For the time being, however, the boss must take responsibility for the mistakes. Olsen is available to anyone and will answer questions publicly at a "town hall meeting". A report on the current state of affairs will also be published every Friday. In this way, the entrepreneur hopes to rebuild trust through honesty and authenticity.
