Wherever wealth is accumulated, there are always people willing to steal it. In the 19th and 20th centuries, criminals like Frank and Jesse James, Clyde Barrow and Bonnie Parker stole from banks, trains, and stagecoaches. Earlier, highwaymen like Dick Turpin robbed travelers on the roads of England. Today, criminals rob financial institutions and individuals using a computer. It may be less glamorous than holding up a bank with a submachine gun, but it is just as effective, with thieves pilfering $13.6 billion from cryptocurrency exchanges from 2012 to October 2020. However, these attacks have had the positive effect of spurring innovative approaches to making exchanges more secure.
Recent High Profile Attacks
KuCoin was hacked in September 2020. It is considered one of the largest hacks in history. Analysts estimate that $280 million was stolen and then laundered through mixers and the decentralized exchange Uniswap.
A hacker managed to steal $25 million worth of cryptocurrency by attacking the dForce DeFi protocol and finding vulnerabilities in the platform’s token standard. Luckily, the hacker changed his mind, and the stolen funds were recovered a few days later.
bZx has experienced several hacks in 2020. Twice in February, hackers stole $1 million from the platform. Hackers struck again in September, stealing a total amount of $8 million.
– Nexus Mutual Founder Hacked
Hackers do not only target institutions. They also target individuals. Hugh Karp, known as the founder of Nexus Mutual, had $8 million worth of Nexus tokens stolen from his wallet in December.
How Exchanges Are Improving Security
Exchanges have started adopting several useful features to protect themselves and customers from cybercriminals. The most commonly known security feature is two-factor authentication, used by Gmail and various social media platforms. This authentication process involves completing two verification steps that can include using codes, mobile phone numbers, and biometrics.
Other features include multi-signature vaults and integrated cold wallets. Multi-signature vaults keep the exchange platform’s vaults secure. The user has to enter several security keys to perform a transaction. Without these keys, no funds can be withdrawn from the wallet. Also, each withdrawal generates a new security key and obsoletes the old one.
A cold wallet is a hardware device for storing crypto; it is not connected to the internet. But the user can still check their balance and spend the coins if necessary. But, they are harder to hack because they are not connected to the internet like hot wallets.
While these features are effective, they are not always perfect. The team at Godex has determined that the best way to keep users safe is to make an account-free site. Traders can use a crypto exchange without id verification on Godex and reduce the chances of losing their coins significantly. Since there are no accounts on the site, there are no hot wallets to steal from. Also, with no verification process, there are no personal details of customers to steal.
Useful Tips for Protecting Your Crypto
Even the most advanced security features do not make exchanges completely safe. Hackers are persistently looking to exploit loopholes and weaknesses in security measures. Eventually, they manage to find their way in. The primary responsibility rests on coin owners to keep their investments safe.
– Never Keep Crypto on an Exchange
The vast majority of theft has occurred on exchanges. Never keep cryptocurrency on an exchange unless planning on using it to conduct a trade. Do not even keep it in the exchange’s wallet. It is better to keep crypto in your own cold wallet because, as stated earlier, the coins are not connected to the internet. This is opposed to hot wallets where the coins are stored online.
– Protect Your Phone and Computer
Ransomware is malicious software that is uploaded onto someone’s phone or computer and steals the data on it. The thief might then ask for cryptocurrency in return for releasing the data back to the owner.
To prevent this:
– Keep your operating system and all anti-virus software up to date.
– Do not store compromising photos, videos, or sensitive information on phones or computers.
– Keep such material on an external hard drive.
Closing Thoughts About Exchange Security Improvements
Exchanges implementing new security protocols will make it harder for thieves to steal. But, the thieves always find new ways to access the exchanges illicitly. It is a constant battle between thieves and exchanges, with each trying to keep up with the other. Godex has the best and simplest approach to security. They do not have accounts to steal from. Traders who value their security should choose Godex as their primary exchange.