Rain Exchange Large Wallet Breach

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Rain Exchange Logo/Homepage

Rain is a centralized cryptocurrency exchange based in Bahrain, operating in the Middle East and Southwest Asia. Licensed by Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA), Rain adheres to rigorous cybersecurity and banking standards. Despite all that, the exchange recently experienced a hack resulting in a $14.8 million loss of funds, detected on April 29, 2024. The stolen funds, consisting of BTC and ETH, were swiftly moved to instant exchanges and converted. Rain promptly isolated the issue, strengthened security controls, and covered potential losses. After an exposure by XachXBT, they assure customers that all assets are held securely and regulatory compliance is maintained. Operations remain uninterrupted, and Rain is cooperating with authorities to address the incident and enhance platform security.

This is a global/international case not involving a specific country.

About Rain

"Rain is a centralized cryptocurrency exchange (CEX) that is headquartered in Bahrain. It also operates in several Middle Eastern and Southwest Asian countries."

"The simplest way to trade crypto in the UAE. Rain is here to guide you on your journey to buy and sell Bitcoin and other cryptocurrencies online. With you, every step of the way."

"Rain is licensed by Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA). We are subject to rigorous cyber-security and banking standards." "We manage your digital assets using Rain’s proprietary offline Cold Storage system, meaning your funds are protected." "We provide trilingual support around the clock and guarantee you will always talk to a human, whether in live-chat or email."

"Crypto detective ZachXBT stated on his Telegram channel that the Middle Eastern cryptocurrency exchange Rain appears to have been hacked, resulting in a loss of $14.8 million USD. The breach occurred on April 29, 2024, when Rain's BTC, ETH, SOL, and XRP wallets experienced suspicious outflows of funds, which were quickly transferred to instant exchanges and converted into BTC and ETH."

"Bahrain-based crypto exchange Rain fell victim to a $14.8 million exploit, according to blockchain sleuth ZachXBT. The stolen funds have been divided up into wallets containing 137.9 BTC and 1,881 ETH, both of which have been inactive since the exploit occurred on April 29. "It appears the crypto exchange Rain was likely exploited for $14.8M on April 29, 2024 after their BTC, ETH, SOL, and XRP wallets saw suspicious outflows. Funds were quickly transferred to instant exchanges and swapped for BTC and ETH," ZachXBT wrote on Telegram."

"We assure you that we have already taken all the necessary steps to address this matter to protect customer funds," the exchange said. "As soon as we became aware of the incident, we isolated the issue and put additional controls to strengthen our security."

"We would like to address news circulating about a security incident involving Rain, and let our customers know that the situation has been resolved. We assure you that we have already taken all the necessary steps to address this matter to protect customer funds. Customers' funds are under custody, fully accounted for, and held on a 1:1 basis. This means that all your fiat currency and crypto assets are held with the highest standards of security and regulatory compliance.

Rain Management W.L.L is licensed and regulated by the Central Bank of Bahrain and Rain Trading Limited is regulated by the ADGM Financial Services Regulatory Authority, which means we maintain a 1:1 asset-to-funds ratio in line with regulatory requirements.

As soon as we became aware of the incident, we isolated the issue and put additional controls to strengthen our security. Rain Group has covered any potential losses resulting from this incident, ensuring that our customers' interests remain protected. All customer and operational activity including crypto buy, sell, send, receive, along with fiat deposit, and withdrawals, remain operational and uninterrupted across all our platforms.

We are committed to upholding the highest standards of security and regulatory compliance. In response to the incident, we have taken immediate steps to further strengthen the security of our platform. We are also fully cooperating with the relevant legal and regulatory authorities and specialist advisors to ensure that this issue is handled appropriately."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Rain Exchange Large Wallet Breach

Date	Event	Description
July 25th, 2023 2:07:13 AM MDT	Brokerage Approval	The Rain cryptocurrency exchange is granted approval to operate a brokerage.
April 29th, 2024 2:42:07 AM MDT	Bitcoin Theft Transaction	The bitcoin theft transaction for 137.90083531 BTC on the blockchain.
April 29th, 2024 2:42:59 AM MDT	Ethereum Theft Transaction	The ethereum theft transaction for 1,881.203118617584467457 ETH on the blockchain.
May 13th, 2024 8:29:05 AM MDT	The Block Article	The Block publishes an article about the exchange hack.
May 13th, 2024 8:53:00 AM MDT	CoinDesk Article	CoinDesk publishes an article about the exploit.
May 13th, 2024 12:30:00 PM MDT	Rain Issues Statement	Rain publishes a statement about the hack on their website, confirming that all assets are still backed 1:1 and that they have dealt with the situation.
May 13th, 2024 1:40:00 PM MDT	Rain Sets The Example
May 13th, 2024 2:14:28 PM MDT	Statement From Rain	The Block article is updated to include a statement from the Rain cryptocurrency exchange about the exploit. "We assure you that we have already taken all the necessary steps to address this matter to protect customer funds," the exchange said. "As soon as we became aware of the incident, we isolated the issue and put additional controls to strengthen our security."
May 14th, 2024 6:49:39 AM MDT	Reddit Thread	The issue is posted on Reddit, however no discussion appears to ensue.
May 15th, 2024 3:26:48 AM MDT	Halborn Report Published	Halborn publishes a security summary about the Rain exchange incident, in which they state it's most likely considered to be a private key compromise.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $14,800,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered has been estimated at $14,800,000 USD.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.