Crypto exchanges have been predicted to continue coming under attack by hackers well into 2022, according to a report by NBC News.
The news outlet looked at data related to some of the most significant hacks that took place in 2021. At least 20 hacks this year resulted in millions of assets stolen directly from exchanges. On six occasions, hackers spirited away at least $100m, the NBC News report said.
A comparative look at the Federal Bureau of Investigation’s annual crime statistics revealed that bank robbers had been able to steal less than $5,000.
NBC News consulted with crypto security experts who warned that hackers will continue attacking exchanges, because of how lucrative such attacks can be.
As TRM Labs co-founder and CEO Esteban Castano told NBC: “If you hack a Fortune 500 company today, you might steal some usernames and passwords. If you hack a cryptocurrency exchange, you may have millions of dollars in cryptocurrency.”
Hackers are also taking advantage of the way crypto exchanges choose to operate. According to CipherTrace founder Dave Jevans, it’s not just a matter of bad coding. It’s also a matter of how exchanges plans.
Jevans offered some clarification on what it means to hack into a crypto exchange. This is usually done through stealing a “hot wallet”, which is where consumers’ crypto is kept if the exchange has not been quick enough to move them to cold storage, which is an offline wallet.
Jevans added that not many exchanges think ahead by having a rainy-day fund from which they can compensate consumers. And when they are hit by a hack, and they can’t restore the funds, they simply go out of business. It’s like telling people “sorry, you are all screwed”, Jevans explained.
Law enforcement from around the world is trying to get things under control, but not all agencies are structured to take immediate action.
Europol for example, the European Union’s international law enforcement agency, is determined to bust entire networks of crypto criminals and hackers, but the cases take a long time.
Likening attempts to recover funds to the interminable Jarndyce v Jarndyce case from Bleak House, Europol spokesperson Claire Georges told NBC that trying to trace cases and networks that feed into others, creates a never-ending cycle. However, sometimes, these efforts succeed.
Another weakness in stopping crypto hacks is the way the companies set themselves up for failure. Crypto exchanges often set up in jurisdictions where regulations are lax, because they don’t want scrutiny. However, when a successful crypto heist happens, they have no local authorities to fall back on, which ultimately impacts consumers.
While Bitmart and Vulcan Forged recently restored consumer funds, not every exchange has been able to do so.
If you want to stay safe, we recommend sticking with trusted crypto gaming websites, such as Bitcasino, 1xBit or FortuneJack.
