Floating Point Group (FPG), a cryptocurrency brokerage, has frozen customer withdrawals due to a security infringement on Sunday evening.
FPG, an international brokerage that offers institutional clients cryptocurrency market access, reported a temporary cessation of trading, withdrawals, and deposits on June 11, following a cyberattack. The attack’s damage, according to FPG, amounts to an approximate loss of $15 to $20 million.
In a June 15 tweet from FPG’s official account, the firm revealed its immediate response to the breach involved locking all third-party accounts and transferring wallets. As a protective measure, FPG subsequently suspended all trading, deposits, and withdrawals.
Moreover, FPG stated that the impact of the attack was mitigated due to the segregation of its accounts. As per their website, FPG, along with its clients, oversees $50 billion in assets.
This setback is unlikely to instill confidence in the institutional sector towards cryptocurrencies, which is already grappling with bearish market trends and regulatory pressures.
In the prior year, December 2022, FPG proactively sought the services of cybersecurity firm Prescient Auditors, securing its SOC 2 Type 1 certification. This accreditation validates a company’s internal data control safety.
In a later statement, FPG said, “We have engaged with the FBI, the Department of Homeland Security, our regulators, and Chainalysis in our quest to understand the event’s origin and recover the lost assets.”
Due to the investigation’s ongoing nature involving various law enforcement agencies, FPG explained that it couldn’t publicly divulge any further details. Cointelegraph reached out to FPG for more insights on the incident but has yet to receive a response.
This security breach at Floating Point Group serves as a reminder of the persistent threat of cyberattacks in the crypto industry, underscoring the importance of robust security measures. Even with a SOC 2 Type 1 certification, an assurance of data control safety, FPG became a victim, highlighting that constant vigilance and adaptive security strategies are critical in the fast-evolving digital landscape.
The incident also brings attention to the issue of investor confidence. Cybersecurity breaches could dampen institutional interest in the cryptocurrency sector, especially when combined with the current bearish market trends and increasing regulatory scrutiny. The challenge for crypto firms is not only to ensure stringent security measures but also to build resilience in the face of attacks and effectively communicate their actions to maintain and restore customer trust.
Lastly, the role of law enforcement and regulatory agencies in such incidents indicates the importance of cooperation between these entities and crypto firms. Transparent and timely involvement of these agencies can help resolve issues and improve overall industry practices. This incident could drive discussions on further refining the protocols and communication strategies in response to such crises in the future.