The crypto space has experienced increased attacks from hackers; it has been an almost weekly thing for crypto companies and accounts of individuals to get attacked by hackers. There has been an increase in criminal activities in the crypto space in general. One could also attribute it to the downtime crypto is experiencing and the rush to cash out, even if that is from hacking the wallets of others.
Crypto Exchange company Deribit was just recently a victim of one of these hacks, hitting a loss of $28 million in a Hot wallet hack. The crypto options and futures exchange company had $28m withdrawn from their account by hackers. It even caused them to pause withdrawals.
The hackers were able to gain access to the wallet server of Deribit, which gave them an opening to withdraw from the hot wallet. The company stated that its client’s assets are safe and were not affected by the hacks, but withdrawals have been put on hold to protect their interests as the company carries out all security checks. It is, however, not as bad as it looks, as 99% of the company’s assets are kept in cold storage, with only 1% being put into the hot wallets, which was what the hacker was able to gain access to.
The company’s chief commercial officer told news outlets that the balance sheet assets of Deribit would cover the loss in a separate space from the company’s $40 million insurance fund. However, the company has no news on the hack beyond what is publicly known. Now moves are being made toward figuring out how the hackers could gain access to the hot wallets and withdraw such a large sum.
Unfortunately, Deribit is just another crypto company on the list of crypto companies that have suffered hacks in the recent weeks, with October recording the highest number of losses by these companies, the amount totaling over $718 million that was stolen in just the first two weeks of the month, companies were coming out almost every day about the hacks they had been subjected to.
Could The Recent Hacks Be Attributed To The Crypto Downtime?
There is no evidence supporting this claim. However, it is worrisome that the hacks gained even more momentum as the cryptocurrency market continues to suffer a bearish trend. Only those who understand crypto would be able to initiate these hacks. Could these hackers have ties or insiders in the crypto space? Or could they be crypto enthusiasts looking to make huge money even while the space suffers a downtime? While this is mere speculation, it is something to think about.
What Could Be Done To Put A Stop To The Hacks?
It may be impossible to completely stop hacks, as they are expected in the crypto space and every part of the tech and financial world.
It is, however, possible to build a more robust security system that makes it harder for these hacks to happen. Impenetrable security for wallets would be ten times harder for criminals to access, as they would have a more challenging time breaking through the walls of code securing the wallets.
The success of the hacks has a possibility of being attached to insider information, so it is paramount that the security systems put in place are not only external but also internal so that the systems are not compromised by someone who has access to them.
There could also be more information on protection for individuals who have had their wallets hacked and money wiped off, which often occurs through clicking a strange link by an unsuspecting individual. People in the crypto space must know only to click any link they see to verify it’s the source.
Conclusion
Unfortunately, more crypto companies and enthusiasts may be subjected to these hacks. Until there is a definite way to stop them, millions will be lost to greedy hackers, and crypto platforms like Deribit and other crypto exchanges may have to pause operations due to the hacks they may experience.
It slows down the company and takes off the money that would usually be circulated in the Crypto Ecosystem. Hacks are a massive detriment to the growth of the crypto space.
