Unocoin Suspends Services Following Infrastructure Breach and BitGo Wallet Outflows

Indian cryptocurrency exchange Unocoin suspended all platform operations following a multi-stage security breach across its server infrastructure ¹. The company initially identified unauthorized activity on Nov. 6, prompting an immediate request to freeze enterprise custody accounts managed by Fireblocks and BitGo at 11:24 UTC and 11:29 UTC, respectively ¹. Despite receiving confirmation from both custody providers that the freezes had been executed, additional unauthorized intrusions were discovered on Nov. 9 ¹.

Subsequent internal reviews confirmed that the exchange's broader systems had been compromised, forcing the team to shutter customer access ¹. On Nov. 12, Unocoin uncovered outgoing transactions originating from an Ethereum wallet managed through BitGo's infrastructure, which was traditionally used to fund ERC-20 token distributions ¹. The exchange noted that BitGo has launched a priority inquiry into how the transfers cleared despite the requested freeze ¹. However, Unocoin admitted it lacks full onchain visibility into the extent of the unauthorized activity because its BitGo enterprise accounts remain inaccessible and BitGo utilizes change-address architecture ¹.

Custody Exposure and Recovery Timeline

Unocoin confirmed that more than 90% of user digital assets remain secured in cold storage and stated that cryptocurrencies are never stored directly on its application servers ¹. Instead of patching the compromised environment, the exchange plans to rebuild its entire server infrastructure from the ground up, estimating the reconstruction will take approximately 4 to 5 working days ¹. The exact root cause and the full volume of exposed data or assets have not yet been established ¹.

The incident highlights operational vulnerabilities surrounding exchange infrastructure and third-party custody integrations, a frequent factor in systemic security breakdowns detailed in how digital assets become unspendable. Unocoin said it is currently working with BitGo and Fireblocks to audit transaction logs and determine the full scale of unauthorized withdrawals before restoring operational services ¹. At the time of writing, $ETH traded at $2,013, down 1.6% over the preceding 24 hours.