3 Things to Learn from 3 Big Crypto Hacks in 2020

Background

One thing that was noticed in the crypto market last year was the shift in the attitudes of the bigger institutions, everyday investors and other financial institutions – all of which began to show an interest and inclination towards the cryptocurrency market.

However, this increased positive attention from all sectors also saw an increased attention of the hackers and scammers. Just during the first 10 months of the last year, a total of $1.8 billion was stolen from the crypto market by hackers. It has been expected that banks will soon be joining the crypto community, following the transformation of the virtual currency market from a niche to a mainstream trading asset globally, by millions of people all around the world. The fact that banks will now join the crypto market, the hackers have been on an alert more than ever, given that their target gains have also skyrocketed. Learn more about bitcoin and crypto on bitcoin-billionaire.net.

This article aims at providing key valuable insights to all the institutions, especially the financial ones looking to join the crypto market. This article relies on the following three key tips and points for increasing the awareness of these institutions upon this matter:

Hackers can Hack and Steal from the Hot wallets

Last year a number of crypto exchanges from different parts of the world, majorly from Asia suffered big hacks from a series of hackers’ attacks. What hackers did was that they stole the private keys from the hot wallets of these exchanges. These hack attacks were confirmed by all these digital currency exchanges, clarifying that the hackers had stolen only from the hot wallets. One thing common in all these attacks was that the cold storage (wallets) remained untouched from the hackers.

Even the Cold Storages are not as Secure as They Are Thought to be

It is said and believed that the cold wallets enable conducting transactions and the management of digital currencies without connecting to the internet. A few of the exchanges even guarantee that they do not connect to the internet, thus shielding the private key of the users from the hackers. If we analyze this claim, it is half true. This is mainly because, the users of the service require to get a string of auto generated data supplied by the blockchain for making a crypto transaction. The aforementioned process is a compulsory one as it validates the transaction, otherwise rendering it invalid by the miner. This makes the cold storage prone to an attack of interception by hackers as well.

Regardless of all the security efforts, the instant a user connects their wallet to the internet in order to buy, sell or exchange digital currency, their wallets become susceptible to the threat of being hacked. Hackers have developed frameworks and programs to virtually intercept any kind of server or machine.

Hackers Anticipate Mismanagement of Private Key

Last year a bizarre incident occurred at a renowned global crypto exchange known as OKEx. What happened was that the CEO of this exchange went missing. Since he had not shared the private key of its virtual assets with others, nobody had access to those assets. There was a subsequent step taken by the exchange, which was freezing withdrawal service on its asset, which went on for more than a whole month. It is claimed that no hack or theft occurred during the team, but the reputation of the organization was affected due to this incident, which caused a reduction of trust and confidence of the users for the exchange. What needs to be learned from this incident is that regardless of the position of the person in the business hierarchy or their authority, the private key should not be known to only one person in the organization.

 A Final Word

To summarize the whole article above, although there was a widespread increase in the acceptance and adoption of crypto throughout the world, with banks entering the crypto market community, there is also a likelihood that the hackers would be well prepared for making attacks and stealing loads. It is therefore advised to all the exchanges and other crypto asset management firms to improve their cyber security, or else they will also be written as an example of cyber-attacks by hackers during this year.