What have we learned from Crypto hacks 2020?

What have we learned from Crypto hacks 2020?

Cryptocurrency Disclosure
February 18, 2021 by Delnia
190
2020 will be remembered as the year institutions, regular investors, and business giants started to take crypto seriously. Reacting to author Ben Mezrich's tweet saying he will never refuse to be paid in Bitcoin once more, Elon Musk teased "me neither". As their prices took off, cryptocurrencies were invited by worldwide regulators, driven by the OCC's letter of intent published back in July, authorizing U.S. banks to begin offering custody of digital assets.
What have we learned from Crypto hacks 2020?

Crypto Hacks 2020

The rise of crypto over the last year was accompanied by cyber-attacks and Crypto hacks 2020 occurrences on digital assets that gotten $1.8 billion over the first 10 months of 2020.

With huge banks joining the party, hackers will become more incentivized to perform Crypto hacks 2020 than ever before.

The daily rise of big figures active in social media like Elon Musk, promoting and talking around crypto, is also creating new possibilities for more Crypto hacks 2020 through platforms like Twitter.

What will happen in 2021?

Undoubtedly, 2021 may exceptionally well be the year hackers move their sights from crypto exchanges to commercial banks to do Crypto hacks 2020 as they start dealing with crypto.

One thing is certain: hackers will attempt to exploit the “learning curve” that banks will inevitably go through as they enter a new space that requires exceptionally different security protocols and technology that is currently employed in banks’ IT infrastructure.

No two Crypto hacks 2020 are identical. But by closely analyzing the major Crypto hacks 2020 that took place over the past year, we are able to draw three key learnings that can bear important experiences, making a difference banks better protect themselves within the Cryptocurrency space.

Crypto hot wallets; lots of Crypto hacks 2020 !

Altsbit is a little Italian crypto exchange. KuCoin is one of the largest exchanges in Southeast Asia. Harvest Finance could be a niche smart contact DeFi protocol provider, and Exmo is a UK-registered exchange serving clients primarily in Russia and Ukraine. What do these four have in common?

They were all victims of huge Crypto hacks 2020, with hackers taking private keys from their Hot Wallets. Each of these trades rapidly admitted the hack. Also, they show that their hot Cryptocurrency wallets.

In reality, they went out of their way to push that their Cold Storage devices remained intact. Which is the perfect segue to the following takeaway from Crypto hacks 2020.

Cold Cryptocurrency wallets saw fewer hacks

Cold wallets also claim to enable signing on exchanges and managing crypto resources. Without being connected to the internet, keeping users’ private keys outside the reach of hackers. In reality, this claim is only mostly true, at best. Here’s why: In order to form a cryptocurrency transaction. Each client must get a string of auto-generated data made by the Blockchain.

This random string is completely mandatory in approving the signed transaction without this signature. The miner will ignore the transaction and avoid inserting it into the Blockchain.

No matter how safe clients keep their Cold Cryptocurrency  Wallets. The minute they need to buy. Sell or move around Bitcoin, Ethereum. Or any other digital currency, they got to connect the cold wallet to the internet.

Once connected, cold Cryptocurrency wallets become vulnerable to assaults. Skilled hackers know how to inventively find attack vectors on essentially any machine connected to the internet. Beyond any doubt, it might take time and effort. But the general rule of thumb is that it takes an average investment of $1M to hack a single PC.

Once hackers set their sights on a PC with a cold Cryptocurrency wallet plugged into it. They will discover a way to hack it. Since any transaction to the Blockchain is irreversible. Hackers can utilize your private key to create a transaction and empty your account from all its digital assets minutes after they take over your local environment.

Unclear key management protocols are an accident waiting to happen

Something interesting happened to global crypto exchange OKEx back this Fall. Its founder went lost. Taking with him exclusive access to users’ private keys. OKEx reported a withdrawal freeze on all of its resources. Which ended up lasting over five weeks. Whereas there were no Crypto hacks 2020 and direct out-of-pocket loss. The reputational harm to OKEx was serious, undermining the fundamental trust between the exchange and its clients.

The key takeaway from the OKEx incident is that any institution dealing with Cryptocurrency can’t afford to run an architectural flow with a single point of failure. This is often exactly where effective governance, control, and compliance are required in defending digital resources from both hackers and inside jobs.

In other words, no single individual should have access to all private keys—no matter how high their pay grade is.

At last, 2021 has incredible potential for going into the books as the year in which crypto enters the official standard. With banks becoming major players in this market. But the preface for this blushing prediction is that bankers learn from the difficult lessons that the Crypto hacks 2020 taught us.

Otherwise, they will discover themselves as the targets of cyber-attacks that will bear disastrous results in, direct financial loss, reputational harm, and loss of goodwill.

References
https://www.nasdaq.com/articles/3-key-takeaways-from-last-years…
https://cointelegraph.com/news/exmo-crypto-exchange-suffers…
https://cointelegraph.com/explained/fighting-money-laundering…

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