Hacked cryptocurrency exchange Exmo is not able to recover a large amount of stolen funds as hackers withdrew millions of dollars in crypto through the Poloniex crypto exchange.

On Dec. 21, Exmo announced a major hack causing the platform to freeze all withdrawals from the exchange. The United Kingdom-based company now estimates total losses to stand at more than $10.5 million in various digital assets like Bitcoin (BTC), Ether (ETH), Tether (USDT), XRP, Bitcoin Cash (BCH), and Zcash (ZEC).

Exmo executives allege that as much as $4 million of totally stolen assets cannot be recovered due criminals withdrawing the funds through Poloniex. A spokesperson at the Poloniex Compliance Department told Cointelegraph:

“After we received the information from the Exmo team, we quickly identified and froze the two accounts. Unfortunately all affected assets had been withdrawn hours before we were even contacted by Exmo.”

According to Exmo’s calculations, Poloniex allowed hackers to withdraw $1 million in XRP and $2.8 million in ZEC. Exmo executives alleged that the reason behind the loss was lack of Anti-Money Laundering measures applied by Poloniex. As Poloniex reportedly moved its headquarters from the United States to Seychelles, Exmo filed a report on the issue to the Seychelles Central Bank.

Poloniex subsequently denied Exmo’s allegations to Cointelegraph, claiming that the exchange has strong AML and Know-Your-Customer policies:

“Regarding our KYC and AML policies, Poloniex adheres to stringent procedures to monitor, detect, prevent and report possible money laundering and financial crimes. We utilize industry-leading software from Jumio, EVS and Elliptic to conduct identification, verification, OFAC, sanctions and transaction tracing. The affected accounts were created more than 4 weeks ago and were fully verified using the aforementioned software and standards.”

As previously reported, Exmo’s security incident caused the platform to lose about 5% of its total assets. The exchange said that the hack only impacted the exchange’s hot wallets, promising to cover user losses. As part of an investigation to recover the stolen funds, Exmo provided wallets associated with hackers and announced collaboration with major global exchanges in Kraken and Yobit as well as crypto analytics firms Chainalysis and CipherTrace.

In a Dec. 23 security incident update, Exmo said that the exchange expects to start resuming withdrawals for major cryptocurrencies between Dec. 25 and 26.