How can an exchange account get drained?

Hackers can drain your crypto exchange account by gaining unauthorized access to your password or login credentials. This often happens through phishing links or malware that secretly steals your login credentials.

Attackers may also exploit weak passwords, reused credentials from data breaches or SIM swaps to bypass two-factor authentication (2FA). Once they gain access, they transfer funds to anonymous wallets, often routing them through mixers or decentralized exchanges to hide their tracks.

If you log in to your crypto exchange account and find your assets gone, it can be terrifying. In crypto trading, having your exchange account drained is the worst-case scenario. When it happens, it’s not the time to blame yourself. You need to respond quickly and think clearly.

This article walks you through the essential steps to secure any remaining funds, start tracking the stolen crypto and prepare a formal report.

Freeze and secure all access points

To block any further access to your exchange account by scammers, you need to secure all access points. Start by changing your exchange password using a secure, uncompromised device.

Cancel all API keys associated with trading bots or external tools, as these may allow unauthorized access. Disconnect any linked wallets or third-party services.

Enable or update 2FA to strengthen your account security and prevent additional logins. Finally, contact the exchange’s official support through verified channels. Avoid responding to unsolicited messages or links, as fraudsters often impersonate support staff in such cases.

Gather proof and record

After securing your account, start recording every detail of the incident. Capture screenshots of suspicious transactions, wallet addresses and any correspondence with support staff.

Download your full transaction history, withdrawal records and login logs before they can be altered or deleted. Keep all relevant email and SMS notifications, including those for password changes, failed logins or withdrawals.

Organizing this evidence will help you and investigators trace the attacker’s actions. These records are crucial for recovery claims with the exchange, insurance filings or reports to the police and cybercrime authorities. The more precise your documentation, the easier it will be for officials or blockchain analysts to link wallets, identify patterns and support your efforts to recover the stolen funds.

Did you know?* In 2019, Binance lost $40 million worth of Bitcoin (BTC) in a major security breach. Thanks to its Secure Asset Fund for Users (SAFU), every affected user was fully reimbursed within days.*

Notify the exchange and file an official report

Report the incident immediately through the exchange’s official security or compliance portal, providing detailed information and supporting evidence.

If support responses are delayed, escalate the issue to higher support tiers or verified social media channels. Request an immediate account freeze to prevent further unauthorized access and ask for onchain tracing assistance to track the stolen funds.

File a formal complaint with the appropriate authorities, such as the Internet Crime Complaint Center (IC3) in the US or Action Fraud in the UK, including all documented proof. Prompt reporting increases your chances of recovering funds and helps exchanges and law enforcement coordinate more effectively against the attackers.

Did you know?* In the 2018 Coincheck hack, over $530 million worth of NEM (XEM) tokens vanished due to weak wallet security. It pushed Japan to tighten crypto regulations overnight.*

Trace and track the funds (if possible)

After notifying the exchange and authorities, consider hiring an expert to track the stolen funds using blockchain explorers or analytics tools such as Etherscan, Arkham or Chainalysis Reactor.

Look for transfers to mixing services, privacy coins or known exchange deposit addresses; these may indicate that the attacker is trying to launder or liquidate your assets.

Share all wallet addresses, transaction hashes and time-stamped details with the authorities and the exchange’s security team to support coordination across platforms. Even if recovery isn’t immediate, accurate tracking increases the chances of freezing or identifying the funds before they move into untraceable channels.

Did you know?* In 2014, Mt. Gox lost 850,000 BTC while handling about 70% of all Bitcoin trades. Its collapse sparked global awareness of crypto security risks.*

Secure your other accounts and devices

Once you’ve contained the immediate breach, strengthen your overall digital security. Run a full antivirus or anti-malware scan on all devices to eliminate any hidden threats.

Use services like Have I Been Pwned to check for leaked credentials and identify compromised email addresses or passwords.

Update passwords across all connected platforms — including email, social media and other exchange or wallet accounts — ensuring each uses strong, unique credentials. Move remaining funds from exchange wallets to hardware or multisignature wallets for greater security and control.

Alert the community and monitor movement

After reporting the theft, inform your crypto community about the incident. You can also ask for assistance in tracking the stolen funds.

Share verified details, such as wallet addresses or suspicious transaction links, with trusted groups on Telegram, Discord or X. Community awareness often leads to faster detection when stolen assets move through exchanges or decentralized finance (DeFi) platforms.

Many exchanges monitor reported addresses and may freeze assets if alerted in time. You can also set up real-time alerts for the hacker’s wallet activity using blockchain monitoring tools. This helps you track the movement of stolen funds and provide timely updates to investigators or exchange security teams. Collective vigilance increases the chances of identifying warning signs and preventing further misuse of your assets.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.