Not your keys not your crypto is a common saying for people in the crypto world. But what if a so called cold wallet store system starts to empty your funds does it beg the question of what might have been going on?
For the most part the safest possible backup is a cold wallet or a paper wallet in which on you have access to the keys and information to tap into those wallets. The information is never shared or presented online ever.
However today reports have come in of people saying their entire wallets have been drained of funds. Personally I don't consider this a cold wallet storage but instead more on the boarders of a hot wallet or somewhere in between it seems. The reason is the application can be downloaded on the computer, iphone or android systems which in reality it subjects them to possible hacks from normal computer viruses and the updates as well can be comprised.
Speculated Reasons
I for one have seen my own hardware wallet show $0 at times but that's normally from software updates but if I check the wallet ID itself on the blockchain directly and not use the hardware wallet I can see those funds in my account.
This is another possible case of this or it could be hackers attacking the supply chain and tampering with the software source code on the server for users to download. personally this is why I hate doing any updates on any machine including hardware wallets. I could care less about the flash and simply just want a solid hardware wallet that keeps me safe.
Atomic Wallet has recently come under fire for a few reasons as of late. The first being it's native notice called Atomic Wallet Coin (AWC) and it's liquidity issues and also for listing the $BEN token a meme token launched by BitBoy. Ya know that guy that preached he would never do that and exit in fact did just that go figure lol
Constant Hacks
The biggest issue we are seeing with DeFi and other systems like this lately is that they are coded in a programming language which can be hacked, exploited and overall tampered with. It's why we see constant hacks happening all the time on these systems for the last two almost three years with clearly no end in sight.
It is very clear that if any of these wallet companies and defi companies want to actully ever become a real major player then hacks need to be minimized or fixed to never happen through versions system in place. This is where people get mixed up as well. There's nothing wrong with the blockchain and the security of it these are instead applications that run on top to the blockchain and just pull data and allow a easier UI interface for people to interact with. The issue with that is it's software and it can be hacked.
Many of these hacks go pretty unnoticed as they are on the smaller side of things. For example Tornado Cash was hacked for 1.2 million on May 20th and Jimbos Protocol on May 28th lost over 4k ETH worth around 7.5 million dollars.
What we are seeing however is smaller ammounts which most likely means these systems are empolying wallet transfers of maxing wallets at a certain size so if any one is hacked it limits the damage overall. However it's a Band-Aid solution so far that still remains the same attacks happening over an over again.
What's the solution to all of this? At some point something will come up and it might not even be defi anymore.