A Wave of Custodial Exchange Hacks Concerns Traders
Two Asian exchanges have been hacked in the past 12 days, increasing the need for non-custodial exchanges.
On the 29th of August, Hong-kong based exchange Bilaxy was hacked and lost close to $21M in ERC20 Assets. Just 10 days earlier, Japanese exchange Liquid also got hacked, and this time they lost $91M.
The modus operandi on both of these attacks? Hot wallet breach. Custodial exchanges generally have their assets on a single wallet that’s always moving (thus the term ‘hot’), and attract hackers worldwide. Combine that with some exchanges’ lackluster security, and you have a recipe for disaster.
These past few days we’ve seen just how big Bilaxy’s hack was. HOGE, a token listed in the Asian exchange, has said that all of the tokens listed in Bilaxy have been transferred out from the exchange. The token has decreased 35% in value since then. This just goes to show how impactful a breach like this can hit a small project.
Issues like these have traders concerned about the security of their money. At the end of the day, having your crypto in an exchange wallet is no different than having it in a bank. Your money can be gone in seconds. Non-custodial is the way to go.
What Can We Do?
Until custodial exchanges make serious strides to be more secure, investors need to keep their money with them.
The wallets that crypto exchanges provide you aren’t really yours. Same goes for the money. Only when the coin leaves the exchange and goes to your wallet, it’s really your property.
Getting your own wallet is easy. There’s plenty of options you can look, and they’re all somewhat safe.
The only way someone can hack your wallet is if they get your private key or 12-word phrase. As long as you write your 12-word phrase on a piece of paper and keep it safe, there’s no way someone can hack your wallet.
We’ll talk more about wallets in later articles. But some of the best wallets to get started are:
- Exodus Wallet – Hands down the best wallet for newbies. There’s mobile and desktop versions, as well as a hardware wallet.
- Ledger Nano S – Hardware wallets are for the most security-frenzy individuals, or just people that want to keep their money with them at all times. The Ledger Nano S is great to get started and easy to set up.
In The End, It’s All Up To Us
Finally, we can only say that crypto security is not something to be meddled with. Even though blockchain is one of the safest technologies around, hackers will find ways to mess with centralized platforms like exchanges. That’s why non-custodial exchanges like Cryptospace are here to help you.
“Not your key, not your crypto”, we like to say. Rather than ‘hope that users will have the necessary psychological preparation’ for hacks, like Bilaxy says, it’s better if you keep your money close to you, and transact with non-custodial exchanges.
Institutional investors and high net worth individuals are transacting with us. Shoot us an email at firstname.lastname@example.org and we’ll get you set up in less than a day.