Stablecoin neobank Kontigo hit by $340K USDC hack, vows 100% reimbursement

Venezuela-focused stablecoin neobank Kontigo has announced plans to compensate customers after over $340,000 in USDC was drained from customer wallets in a security breach.

According to a Jan. 5 update, Kontigo confirmed that they “detected unauthorized access that affected the funds of some users.”

“We immediately isolated the systems involved, activated our security protocols, and are maintaining an active investigation to determine the scope of the incident,” a translated excerpt from the announcement said.

As per official estimates, approximately $340,905 worth of USDC was reportedly stolen in the incident, and 1,005 users were affected, Kontigo said in a subsequent update.

While an exact post-mortem of how the breach occurred is yet to be published, the neobank stated that its security team is working with independent external cybersecurity specialists to conduct a thorough review of the incident.

Last week, many of the company’s users took to social media to share screenshots showing unauthorized attempts to access their accounts. As of press time, it is not known if these reports are directly connected to the breach.

“Kontigo will reimburse 100% of the impacted amounts,” the neobank stated, adding that the restitution process is being handled on a case-by-case basis in accordance with the firm’s security protocols.

Among other post-incident measures, the firm is also operating under a “reinforced monitoring scheme” as systems are gradually brought back online to ensure operational integrity.

Founded in 2023, Kontigo is a San Francisco-based financial technology company that specifically targets the Latin American market and the Latino community in the United States. It offers stablecoin-based financial services such as USDC-denominated savings accounts, cross-border payments, debit and credit cards, and investment access to tokenized U.S. stocks and Bitcoin.

Kontigo is backed by major investors, including Y Combinator, DST Global, and Coinbase Ventures, and closed a $20 million seed funding round last month that valued the company at $100 million.

Crypto industry under attack?

The latest incident comes just as the industry remains on edge over a wave of large-scale attacks targeting crypto users.

Last month, Binance-owned Trust Wallet became the victim of a significant exploit that targeted users of its Google Chrome extension. Total losses have been estimated to surpass $7 million, and the firm has publicly vowed to compensate all affected users.

Meanwhile, on Jan. 5, blockchain security firm SlowMist rang the alarm bells on a major phishing campaign designed to trick MetaMask users into giving up their seed phrases under the guise of activating Two-Factor Authentication.