Indian Agency Says Hackers Use AI to Breach Crypto Exchanges, Steal Funds, Warns of Weekend and Holiday Attacks

Hackers are using AI to find security flaws at cryptocurrency exchanges, breach their systems and manipulate internal payment systems to steal funds, Indian authorities warned. Officials also identified attacks timed to weekends and public holidays, when security staffing is thinner.

Cointelegraph reported on November 5 that the Indian Computer Emergency Response Team, or CERT-In, disclosed the tactics used by the hacking group Crafty Falcon and urged exchanges and financial firms to stay alert. After issuing an initial warning in October, the agency this time explicitly identified cryptocurrency exchanges as targets.

The attacks began through poorly secured apps or development and testing systems. The hackers then expanded their access into live operating systems and directly called payment and payout APIs used to process fund transfers, allowing them to move money out. APIs are the channels through which systems exchange functions and information, and the attackers exploited legitimate payout functions.

AI was used to speed both the preparation and execution of the attacks. The hackers analyzed target companies' program code and quickly created or modified the malicious code needed for the intrusion. Authorities said the attacks were moving at "machine speed."

Damage reports have continued even from companies that had already taken security measures. CERT-In said reports were still being received from non-bank financial firms and fintech companies that had previously received a limited alert and adopted security steps.

Authorities recommended increasing monitoring staff on weekends and public holidays and configuring alerts to trigger on smaller anomalies than usual. They did not disclose the names of the affected exchanges or the size of the losses.