Zilliqa asks exchanges to pause ZIL transfers after suspected cold-wallet theft
Zilliqa has urged cryptocurrency exchanges to temporarily suspend ZIL deposits and withdrawals after an exchange partner reported a suspected cold wallet compromise that resulted in stolen tokens. The layer-1 blockchain said it is investigating the incident with the unnamed partner but has not disclosed how many tokens were taken, their value, or how the attacker gained access.
What happened
- Zilliqa confirmed that ZIL was stolen from a cold wallet controlled by an exchange partner and said the matter is under “active investigation.” The team asked users to follow its official channels for verified updates.
- The project emphasized the incident involves an exchange partner’s wallet rather than the Zilliqa blockchain itself. No technical post-mortem, affected company name, or attack method has been released so far.
- As a precaution, Zilliqa requested that exchanges temporarily restrict ZIL transfers. Participating platforms can block deposits and withdrawals while they perform checks or await more information. Onchain transfers between regular addresses on the Zilliqa network remain unaffected.
Exchange reaction
- Bitget separately announced a suspension of Zilliqa-network deposits and withdrawals from July 20 at 18:15 UTC+8 for “wallet maintenance,” adding it would announce a reopening time later. Bitget did not explicitly link the maintenance notice to the theft.
Market impact and uncertainty
- The security announcement put fresh selling pressure on ZIL: CoinGecko data showed the token trading near $0.00254 at the time of reporting, down roughly 9% over 24 hours. Prices are volatile while details remain limited.
- Zilliqa has not said whether the incident involved a stolen private key, compromised signing infrastructure, or another type of operational security failure. It hasn’t disclosed whether the stolen ZIL has been moved to other wallets or entered centralized exchanges.
- Without wallet addresses or transaction records from investigators, independent verification of the amount stolen or the funds’ movements is not possible.
Why cold wallets aren’t foolproof
Cold wallets—offline storage that keeps private keys off the internet—are a standard custody tool for exchanges. However, prior incidents show offline storage does not eliminate risk. Attackers can target signing devices, key-management processes, or human-controlled operational systems.
- A major example: Bybit lost roughly $1.4 billion in February 2025 after attackers compromised a cold-wallet transaction process, demonstrating how the authorization chain can be exploited even when assets are offline.
- Other recent cases, such as a roughly $520,000 breach linked to Polymarket activity in May, have also pointed to compromised internal keys rather than faults in smart contracts.
Background and context
- Zilliqa launched its mainnet in 2019 and is known for sharding to scale transaction processing. ZIL is the network’s native token used to pay fees and interact with smart contracts.
- The project previously faced technical issues unrelated to custody: a September 2024 bug interrupted block production and required a permanent fix, and the network has experienced other disruptions in block generation and synchronization. Those past network problems have not been publicly tied to this exchange-wallet theft.
What to watch next
- The key open questions are: which exchange was affected, how many ZIL were stolen, what attack vector was used, and whether investigators will publish transaction addresses or a technical review. Zilliqa has given no timeline for concluding its investigation or for when exchanges should restore normal transfers.
For now, exchanges and users will likely remain cautious until more concrete forensic details surface and affected platforms publish wallet addresses or movement logs that allow independent tracking of the funds. Zilliqa says it will provide updates as soon as verified information is available.
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