Zilliqa asks exchanges to pause ZIL transfers after suspected cold wallet theftZilliqa said exchanges paused ZIL deposits and withdrawals after an exchange partner’s cold wallet was compromised, with the amount stolen still undisclosed.

Zilliqa, a layer-1 blockchain network, announced that it is investigating a security incident involving the theft of ZIL tokens from a cold wallet belonging to one of its exchange partners. To mitigate potential further losses, Zilliqa requested that exchanges temporarily pause ZIL deposits and withdrawals while the investigation is ongoing. The company has not disclosed the identity of the affected exchange, the amount of ZIL stolen, or the specific cause of the breach.

The announcement was made via an X post on Monday, where Zilliqa acknowledged that it understands the community will have questions and promised to provide updates once verified information becomes available. The native token ZIL, used for transaction fees and smart contracts on Zilliqa’s network, was trading around $0.0025 at the time, reflecting a 7.1% decline in the past 24 hours.

Zilliqa was launched in 2017 with a blockchain architecture based on sharding, a technology that enhances scalability by distributing transaction processing across multiple nodes. The mainnet went live in January 2019, with co-founders Amrit Kumar and Xinshu Dong. The current situation highlights the ongoing risks associated with digital asset custody, especially when cold wallets are compromised.

This development is significant as it impacts ZIL liquidity on exchanges and raises security concerns within the community. Zilliqa’s communication reflects a commitment to transparency and caution as it assesses the implications of the incident. Cointelegraph reported the news following its editorial standards aimed at providing accurate and timely crypto-related information.