Hello, this is kaz (@ kazukino11111).
A news that the cryptocurrency equivalent of 37 million dollars was hacked in Coinrail, the 17th largest cryptocurrency exchange based in Korea this week, was reported. And yesterday Bithumb ‘s hacking was also reported.
The cryptocurrency market was affected by these news and recorded a significant decline.
Negative news are reported daily in the cryptocurrency area, but how much do we understand about the risk of cryptocurrency trading? In this article, we will explain in detail the hacking dangers and the way of hacking, entitled all of cryptocurrency hacking.
How secure is the exchange?
Currently the government does not enforce restrictions on purchasers of virtual currencies other than using bank accounts registered with their real names.
Upbit, Bithumb, Coinone, Korbit, the top four exchanges in Korea, are obliged to satisfy the Information Security Management System (ISMS) . This is what is negotiated by Korea’s Internet and Security Agency (KISA).
This applies only to exchanges with annual revenue exceeding 10 billion won or exchanges with more than 1 million users per day . Other small-scale exchanges do not need to meet this.
On the other hand, there are still exchanges approved as meeting ISMS at Korean exchanges . Each exchange announces that it will introduce the system later this year.
One of the reasons for degrading the security of cryptocurrency exchanges is hot wallet. It is the safest way to store assets in a cold wallet that was originally disconnected from the Internet, but there are many situations that many exchanges are stored in hot wallets connected to the Internet .
What is the point to judge the security of exchanges? – CRYPTO TIMES
The Korea Block Chain Association recommends that 70% of the cryptocurrency held at least to the citizens who own cryptocurrency be stored in cold wallet.
How do hackers steal information from exchanges?
The most common method is to hack the exchange itself . This is also because it is considered to be much easier than manipulating the cryptocurrency itself. Hackers also use the technique of stealing personal information of cryptocurrency holders using malware.
According to Carbon Black, a security company in the United States, 27% of this year’s hacks were targeted at cryptocurrency exchanges .
In many cases it is said that a method of stealing information such as a private key and transferring the asset to its own wallet was used.
What do hackers do with the stolen cryptocurrency?
The answer to the question of what the hacker does with the cryptocurrency stolen is unclear. On the system called the decentralized ledger, it is quite difficult for the perpetrator to handle the illegally acquired currency immediately after the crime . However, recently, you can see a method of converting to another currency using a decentralized exchange (DEX) and then cashing it.
Distributed exchanges are characterized by high anonymity compared to other exchanges , making it a good place to wash off illegally acquired currencies .
What is the Distributed Exchange (DEX) / Decentralized EXchange? Explain merit and registration method! – CRYPTO TIMES
In early this year, an incident was reported that NEM equivalent to 500 million dollars from Coincheck was hacked, but the publisher NEM Foundation tagged the corresponding token as “Tainted” and tried to trace It was. However, NEM foundations and white hacker ‘s efforts were almost entirely distributed to all over the world through dark web etc, almost all NEMs stolen in vain were stolen.
Is it possible to track cryptocurrency at any time in block chain technology?
Transactions in cryptocurrency are recorded in publicly-opened ledgers so you can track them at any time . However, since coins to be remitted themselves are sent anonymously from Wallet to Wallet, it is difficult to identify who sent coin to whom .
For example, if a hacker stole coins from exchanges and handling them at the dark web or distributed exchanges, tracking becomes very difficult .
Hackers steal hundreds of thousands and millions of coins and immediately exchange them for other currencies. In addition there are tools on the dark web to automate the process of mixing tagged coins with other coins and selling them together.
Each coin is recorded as a transaction on the block chain to which each coin belongs, but hackers try to disturb the pursuers with clever means to make tracking impossible.
Even if the police and other investigation institutions can track the hacker’s culprit, the case that the culprit was blinded after taking a number of measures is possible.
What kind of hacking is happening in the past?
A number of hacks have occurred in the past, and several cases of large scale have been confirmed.
The biggest hacking is the case that 850,000 BTC was lost from Mt.Gox, the world’s largest exchange at that time in 2004 . At that time Japan was said to account for 70% to 80% of Bitcoin transactions. The Bitcoins lost will be over $ 400 million at that time and over $ 5 billion (about 550 billion yen) at the current rate.
In addition to driving Mt. Gox out of bankruptcy, this incident affected the cryptocurrency market over a long period of time, including making a large amount of selling pressure of BTC.
In South Korea, Yobit suffered a second hack and stopped the service. After that, the exchange was acquired by an exchange named CoinBin in Korea and restarted the service.
Can I recover the stolen cryptocurrency?
In the past case, it has not been said that a large amount of stolen cryptocurrency was directly returned, but many cases have been reported in which damage could be mitigated.
Coinrail issued an official announcement after the hacking incident and said that “Coinrail can freeze, regain and compensate 80% of the stolen currency .” In this case Coinrail can cooperate with the issuer of the token and regain the coin corresponding to the amount stolen.
TraDove, the publisher of BBcoin stolen in the case of Coinrail, said, “We have reached an agreement to fully compensate Coinrail and stolen TraDove BBCoin,” and different from the account of the user who held the token We granted the new currency of. Rather than getting back the stolen token at this time, it is mainstream to compensate with another uncontaminated token.
Although the security of the cryptocurrency and the block chain itself has evolved to a more robust one along with technological advances, the security of exchanges tends to be a weak point for investors as well. In the cryptocurrency area, news of hacking damage that is huge day by day is reported.
Even though exchanges have taken various measures as hacking countermeasures, it will become necessary for us to take measures in order to protect our precious assets.
【cryptocurrency security measures】 Securely manage assets such as Bitcoins – CRYPTO TIMES
Author: kaz 【Coin Desk News】 – Source Post: https://crypto-times.jp/crypto-hacking/
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