How Crypto Exchanges Reach World Top Banks’ Level of Security like AOFEX While Facing Hacking Threats
News of numerous digital currency exchange platforms has been attacked by hackers appears frequently in recent past.
Singapore-based digital currency exchange DragonEx made an announcement of pausing deposit and withdrawal due to system maintenance on Mar. 24th; they announced on telegram that DragonEX encountered hacker attacks on the very next day. The amount of this attack has exceeded over 500 Million dollars, over 20 types of crypto currency was stolen. Despite publicizing and updating information about hackers’ wallet address, no asset has been returned until recently.
After the investigation, the security team found that a customer service of DragonEx received a package from a stranger, installed and tied the normal looking software to the backdoor, where the hacker accesses the wallet address and keys as an internal staff.
This textbook Advanced Persistent Threat is not that much of a sophisticated attack. Hackers basically entrap senior tech or management level personnel, and tempts them with high profit software in which operate and stimulate normal quantitative software. Hackers infiltrate the exchange platform by delivering information from the software to the back door.
Maybe hackers didn’t even realize in the first place that they could receive a large amount of money by attacking customer service of the exchange.
Normally professional hackers are team-based. They have targeted multiple exchanges to attack, based from the current situation. In other words, upcoming hacking is yet to come.
On the evening of March 29th, The Korean digital currency exchange platform Bithumb discovered “abnormal expenses” through their surveillance system. Despite the fact that they shut down their deposit and withdrawal immediately, more than 3 million EOS have been stolen. The loss has exceeded $13 million, according to current rates.
The reason of Bithumb’s attack is even more ridiculous: staff of the exchange stole the cold wallet and key, later completed the asset transfer without any difficulties, yet the investigation is still looking for the staff.
At least three other attacks occurred in the very same week.
The occurrence of these attacks not only caused losses to the platform, but also had a huge negative impact on investors — their assets were frozen at the exchange unless the exchanges take responsibilities and compensate them as soon as possible. Moreover, they are likely to miss the fleeting market, such as the recent 20% increase in Bitcoins.
How come that digital asset exchanges are too easy to be stolen?
First and foremost, the development of this industry is not as evolved as traditional banks due to limited time, therefore the exchange has huge security risks. Some exchanges have loopholes in the system, whereas the structure of management is problematic, and lack of experience in risk control and management.
In order to be as secured as traditional banks, digital asset exchanges must comprehensively learn the risk control management system and security technology in traditional banks.
AOFEX for instance, is a “bank-level secured” exchange, because the CEO of AOFEX Ike Ndu has abundant experience in risk control and management in traditional banks. With reference to traditional banking experience, combined with the advantages of blockchain technology, two systems have been created for security reassurance.
Technically, users log in through two-factor authentication, Winton detection and warning system, separation and encryption of hot and cold wallet, dual databases for cross-validation and other fundamental technologies to ensure security; Systematically, AOFEX established internal preventing system, risk control and management, and risk reserve mechanism to further ensure the funds are secured.
With such exhaustive and all-inclusive protection, attacking AOFEX is literally as difficult as attacking banks.
In the crypto currency trading industry, there are very few secured exchange platforms like AOFEX. Unfortunately, majority of the investors are still under huge risks of hacking.
