Zilliqa disclosed July 20 that an undisclosed amount of ZIL tokens was stolen from an exchange partner's cold wallet. The project has asked all exchanges to temporarily suspend ZIL deposits and withdrawals while investigations continue. The amount stolen and the identity of the affected exchange have not been disclosed.
Zilliqa on July 20 reported ZIL tokens stolen from an exchange partner's cold wallet, prompting a network-wide suspension of deposits and withdrawals.
Zilliqa said it is working with relevant parties to determine the scope of the theft and how attackers managed to compromise the cold storage system, which is typically considered one of the most secure forms of crypto storage.
Cold storage hacks are rare because cold wallets are not connected to the internet, making remote exploitation difficult. When compromised, the cause is almost always human — insider threats, social engineering attacks on key holders, or poor operational security around seed phrases and private keys, according to security analysts.
The immediate impact is practical: ZIL holders on exchanges cannot move their tokens during the freeze, locking traders out of their positions during a period of heightened uncertainty. Zilliqa's own blockchain and protocol were not compromised — this was a custodial failure at a third-party exchange.
Zilliqa's announcement was notably light on specifics. The team did not name the exchange involved, disclose how much ZIL was taken, or provide a timeline for when services would resume. The affected exchange has made no public statement of its own.
KuCoin, one of the exchanges where ZIL is traded, suspended deposits and withdrawals for the token on July 19, citing "essential maintenance," according to a notice on its website. It remains unclear whether KuCoin is the affected exchange or if the suspension was a precautionary measure taken at Zilliqa's request.
Zilliqa, launched in 2017, was among the first blockchain platforms to implement sharding technology, a design that splits the network into smaller segments to boost transaction throughput. The project's native token, ZIL, is listed on multiple exchanges including Binance, KuCoin, and Gate.io.
The investigation is still in its early stages, with further updates expected as more information becomes available.
This article is for informational purposes only and does not constitute investment advice.
