Rarely does a month go by without reports of more money being lost in the crypto-sphere. Recent data has detailed more than $2b has been lost since 2011, with many high profile attacks against exchanges and hot wallets. This not only detracts from large-scale investment, but sees the value of cryptocurrency hacks continue to increase as the global cryptocurrency market does. So we ask, as individuals and as a community, what can we do to mitigate the risk?
The Facts and Figures- How Much Are We Talking?
Let’s put some facts with some figures. In 2017, a conservative estimate of more than $200m in Crypto was stolen, hacked or locked up. In 2018, it is estimated that close to $700 million USD has been lost in the first quarter alone! When you take into account the limited supply of some tokens, these numbers are not only startling, they are also incredibly concerning. In fact, from 2011–2018, it is estimated that there has been a loss of:
The Biggest Hacks of 2018 (So Far…)
Some of the most notable (and sizeable) cryptocurrency hacks to date have occurred since the beginning of 2018.
January 2018- The CoinCheck Hack
One of the largest digital currency exchanges in Japan was hacked earlier this year. With approximately 500 million NEM tokens being stolen from Coincheck, at a value of approximately $400m USD. It was reported that Yusuke Otsuka, chief operating officer of Coincheck, said “the stolen funds were kept in an online ‘hot wallet’ as opposed to a much more secure offline “cold wallet.”
February 2018- BitGrail Exchange Hack
Amongst reports of possible insolvency, the BitGrail exchange platform revealed in February that “unauthorised transactions” were found that led to 17 million Nano ($170 million USD) being lost. The exchange has since blamed the Nano team, confirming in a press release that it was a victim of theft, and the hacker “took advantage of malfunctions of the software made available by the Nano team (XRB).” Although the company goes on to imply they are not obliged to repay the money, they are attempting to return some of the funds in good faith.
April 2018- iFan/PinCoin Ponzi Scheme
Vietnamese investors are reeling after IT company Modern Tech was blamed for scamming more VND 15 Trillion- or $650m USD- from investors. After claiming the two coins were established in Singapore and Dubai, the company stated its platform was designed to connect artists with fans, and their coins utility was to purchase tickets and merchandise. It soon became apparent that the ‘lending platform’ was a pyramid scheme, with Modern Tech guaranteeing that the lowest interest investors would receive was 48% per month, lock-in periods and bonus interest for recruiting additional members.
Once members caught on, the founders went MIA, and their office ‘location’ has reportedly been empty since the lease was originally signed. So what can you do to protect yourself from cryptocurrency hacks?
Become a Crypto-Aware Member
Crypto Aware is an organisation developing a first-responder mechanism to alert the community of cryptocurrency hacks and scams. Using public awareness as the first line of defence, the organisation states:
“From public and private scam and fraud reports, we verify and summarise the reports and help the community to improve through education, advocacy, and protection.”-Crypto Aware
By joining the Crypto Aware mailing list you not only strengthen the crypto-community through these principles, you can lead a more active role in preventing cryptocurrency hacks and scams in the future.
Protect Yourself and Your Private Keys
The safest, and only full-proof way to protect yourself from cryptocurrency hacks is to store your private keys offline. By using a cold storage wallet, such as the ECOMI Secure Wallet, you are protecting your investments with the most secure technology available on the market.
The Secure Wallet’s innovative design creates a number of immutable security barriers to protect you against cryptocurrency hacks. First, thanks to its encrypted bluetooth capabilities, the Secure Wallet is never wired, or directly connected to the internet. This prevents any malware or man-in-the-middle attacks.
Second, the Secure Wallet features the Smart MXTM secure element (SE)- a state-of-the-art security crypto-controller. This is designed to generate and store master nodes (private keys) within the hardware device itself, meaning your private keys cannot and will not ever leave the device itself, thereby protecting your assets.
Third, for any transaction to leave the device, you must visually and physically confirm it by using the e-paper display screen and ‘the big red button.’ This security feature ensures that no transaction can ever be conducted without you- the user- confirming/allowing it to happen. The Secure Wallet will also support all major forks, allowing you to capitalise on the distribution of new tokens instantly and securely.