Top 5 infamous security vulnerabilities of the crypto exchange in 2019

The establishment of cryptocurrencies has led to the birth of several cryptocurrency related companies such as crypto exchanges, custodians, among others.

The cryptocurrency exchange platform is one of many companies that allow crypto investors to trade cryptocurrency for other forms of assets, including other cryptocurrencies, conventional fiat currencies, among others.

Of all the companies that emerged from the launch of cryptocurrencies, crypto exchanges, which are mostly called stock exchanges, were probably the most profitable, and significant players in the crypto space are embarking on this business.

However, despite the huge profits associated with this business, most platforms as in other years have failed to impress crypto enthusiasts in terms of securing funds and user data since the beginning of 2019.

Without significant order, Coinfomania looks at the five biggest failures of crypto exchange in 2019.

1. QuadrigaCX

Earth: Canada

Period: January 2019

Lost amount: $ 190 million

The problems began with the then-popular crypto platform following the death of its owner, Gerald Colten, who allegedly held the private keys to the company’s cold storage wallet with an investor funds of $ 190 million.

However, attempts to retrieve the private keys failed, prompting the Kraken cryptocurrency exchange to reach out to the public to provide information that would help recover private wallet keys with a $ 100,000 reward attached to the offer.

Current status: After attempts to recover allegedly lost funds proved unsuccessful, QuadrigaCX leaders filed for bankruptcy procedures with the big four auditors Ernst and Young assigned to monitor the proceedings. The long process of liquidating the company’s remaining assets and lack of funds means that affected users have almost no hope of reclaiming their crypto assets.

2. Cryptography

Earth: New Zealand

Period: January 2019

Lost amount: $ 16+ million

Cryptopia users started this year sadly after reports surfaced that the New Zealand crypto exchange was hacked for $ 16 million.

The operators went on a temporary suspension and immediately notified the authorities to investigate the case.

During the investigation, authorities discovered that part of the stolen funds was sent to the Binance Stock Exchange, which, however, led Binance to freeze the affected account and return some of the money, although the move later became insignificant.

Fifteen days after the first attack on the Cryptopia server, the exchange recorded another attack from one of the wallet addresses used in the first attack, complicating things for the exchange in New Zealand.

Current status: Five months after the hacking, the exchange operators said they were quitting their business, hiring liquidators Russell Moore and David Ruscoe of Grant Thornton New Zealand to liquidate the company to satisfy staff, shareholders and affected customers.

3. Binance

Earth: Malta

Period: May and August 2019

Lost amount: $ 40 million

Whenever crypto enthusiasts hear that the crypto exchange is under attack by hackers, what comes to mind is that criminals have certainly stolen a large amount of crypto assets from the platform.

Well, a popular cryptocurrency exchange, Binance has been hit by both types of attacks this year.

First, in May it was a security breach that led to the loss of 7,000 BTC (worth $ 40 million at the time), and then in August, the alleged theft of 10,000 KYC selfies from an exchange and the search for 300 BTC, to keep photos.

Although the exchange noted at the time that there was no evidence that KYC images were obtained from their platform, the exchange continued to award a 25 BTC reward to each user who would provide relevant information about the location of the hacker.

Current status: Binance has returned the money to users who lost money due to hacking 7000BTC and has also solved the problem of stealing KYC data without compromising the trust of several million users of the platform.

4. Bitpoint

Earth: Japan

Period: July 2019

Lost amount: $ 32 million

In early July, Bitpoint reported that its hot wallet reserve had been robbed, with a hacker stealing cryptocurrencies worth approximately $ 32 million.

Despite calls from the Japanese Financial Services Agency (FSA) to the stock exchange before the attack to improve its internal control, the stock exchange ignored the warning and had to pay a price.

In what could be described as the next line of action for each hacked stock exchange, Bitpoint has stopped trading, withdrawing and deposit services on its platform to prevent further attacks.

Current status: Bitpoint’s parent company, Remixpoint Inc, got into trouble to alleviate investor troubles, promising to compensate investors.

5. UpBit

Earth: South Korea

Period: November 2019

Lost amount: $ 50 million

UpBit found itself in hot waters earlier this week when suspicious hackers broke into the storage of hot wallets on the Ethereum stock exchange and took away a whopping $ 50 million worth of Ether tokens.

In response to developments, the stock market quickly halted withdrawal and deposit services at the time for fear of greater losses.

Current status: Upbit has promised investors that it will bear the damage from hacking, although this compensation was probably not issued at the time of writing (two days after the incident)

Conclusion

Crypto exchanges have always suffered from hacker rage during the year, and blockchain forensics company CipherTrace reported that cryptocurrency robberies and fraud in 2019 reportedly rose 150% (about $ 4.4 billion) in the first nine months of this year. years.

Repeated theft of cryptocurrencies on these platforms has prompted major players in the industry to advise investors not to store their assets on any third-party exchanges, as they are vulnerable to hackers.

The right move for investors is to trade only on such platforms, after which the funds should be transferred to the wallet. A crypto wallet cannot be hacked unless the owner discloses his private keys to a third party, which means that the user takes full responsibility for protecting his property.

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