After a record-breaking $1.3 billion was stolen from cryptocurrency exchanges last year, you’d think customers and those working in the industry would have learned their lesson. Sadly, it seems many more tragedies like this are going to have to unfold before there is a large scale migration toward non-custodial crypto swapping solutions. Let’s take a moment to review what’s happened so far in 2019, and show you how to protect your assets by maintaining true ownership of your money.
2019 Exchange Theft & Losses So Far
Cryptopia: This New Zealand-based exchange rang in the new year with a January hack that resulted in over $3 million being stolen — nearly 10% of their total assets at the time. Both deposits and withdrawals were frozen and have only recently reopened.
Bithumb: Popular South Korean exchange Bithumb recently made the news for when over $19 million in EOS and XRP was stolen. What makes this case especially disturbing is that apparently this was not the result of an outside attack, but rather theft perpetrated by individuals within the company. According to the statement released by Bithumb, an internal investigated pointed to an “accident involving insiders”.
What’s scarier? The hacker working around the clock to break into exchanges and take your money, or the idea that employees who are supposed to be protecting your finds might be the ones taking them?
Quadriga: This was once Canada’s largest exchange, but it has experienced a turbulent past few months which has left a lot of customers hanging. This story actually begins in December of last year, when the CEO of QuadrigaCX (the company behind the exchange) suddenly died. He ran the exchange from an encrypted laptop and is believed to be the only person who knew the passwords and private keys necessary to unlock almost $200 million in user funds. The problem of how to handle the compensation of Quadriga customers continues to this day.
While this was not a hack, it was certainly an awful loss if you had money stored with that exchange. We’ve written before about how centralized exchanges represent a single point of failure. The case of Quadriga shows that this is not just a concern with regard to hacking. If only one important person tragically passes away and the knowledge of passwords and keys isn’t safely backed up, the results can be disastrous.
Imagine being a customer and depositing your hard-earned money in an exchange wallet, and not knowing when or if you’ll ever get it back. Unfortunately, this is what a lot of Quadriga customers are living with every day.
DragonEx: This Singaporean exchange was hacked on March 24th of this year, leading to $7 million in user funds being stolen. Luckily, investigators were quickly able to trace the movement of funds to other exchanges and freeze those wallets, and affected users were promised compensation. This was a small hack in the grand scheme of things, but it shows you it can happen to any centralized exchange.
Coinbene: In March a story broke about Coinbene potentially being hacked. A month later, the scandal has only grown more complicated and confusing, and no one is quite who the bad guys are, according to a recent report in Cointelegraph. Regardless of who is actually the culprit, the blockchain analytics firm Elementus estimates that $105 million worth of cryptocurrency was stolen and moved to unknown wallets before being deposited in wallets on other exchanges.
Don’t get “Goxxed”: OWN Your Crypto
Seriously, this is getting old.
How many times do people need to get “Goxxed” before crypto investors realize that if you don’t hold your money in your own wallet, you don’t really OWN your money.
The only way to be truly safe with cryptocurrency is for you to keep your funds in your own wallets that only you can access.
Of course, if your holdings are spread out across multiple wallets, it can be difficult to keep track of it all, and tedious to build the portfolio you want.
That’s where Faa.st comes in. Connect your wallets, generate graphs and reports of your holdings, and quickly rebalance your portfolio with over 130 supported assets.
You don’t just have to accept hacking, thefts, and multimillion dollar losses as the cost of doing business anymore. Try Faa.st today and take back control of your money.
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