Study Claims Less Than 5% of Exchanges Are Safe From Hackers
Among major channels within the digital asset sphere, crypto exchanges have played a key role in the expansion of they crypto community worldwide. For years, these trading platforms have bridged the gap between the rapidly emerging technology and those interested in participating in what most feel is the future of global finance. By facilitating the trading, holding, and listing of new tokens, exchanges help open the door to cryptocurrency utility and market value. Despite their foundational setting within the crypto market, exchanges have been hit with major security issues that continue to plague users and the wider crypto community sentiment.
Crypto Users and Businesses Suffer at the Hand of Cyber Attacks
A major aspect of the recent decline in the digital asset market is associated with these security breaches and cyber attacks targeting exchanges of all sizes. As mainstream audiences and institutional adoption grows, so has been the frequency and magnitude of these online hackers. Even the most notable and trusted digital asset firms have fallen victim to cyber attacks, resulting in mass amounts of stolen funds and an endless cycle of corporate pay-outs and reimbursement strategies. Despite security initiatives and regulatory enforcements, these attacks remain one of the largest issues the crypto industry faces.
Among one of the most recent events that took place in September targeting Japanese exchange, Zaif, hackers managed to steal approximately $59 million worth of crypto funds. According to official reports, the attack took place mid month, acquiring around 5,956 bitcoin worth $6,000 for every BTC token. In addition, the firm was robbed of other cryptos including Bitcoin Cash and Monacoin. The total amount of which has not been disclosed.
Studies Reveal Even the Largest Firms Remain Vulnerable
Such events have not only played a significant role in market crashes but has also fed growing concerns by the public who feel digital assets are not as reliable as regulated fiat currencies. Despite these major implications, studies have shown that digital asset trading platforms, who currently control the majority of digital wallets, are not enforcing safety practices as they should. A survey performed across more than a hundred exchanges that exceed funds worth $1 million has discovered that major security vulnerabilities have not been properly managed, and remain easily accessible by potential hackers.
Such vulnerabilities in the system include platforms that allow users to sign up using email addresses that are easily traced as well as fail to cover basic security functions such as account verification, strong password enforcements or failing to offer the option for two-factor verification processes. Among the hundred surveyed exchanges, only 4% passed appropriate domain security. Such results are incredibly low considering the constant rate of attack existing within the crypto sphere today.
Despite having gained reputable names within the exchange industry, many of the major exchanges featured in the study have surprisingly failed to reach security demands. Putting this issue into perspective, one of the largest global exchanges, Binance, was listed as the seventeenth most secure exchange within the study. As the crypto community continues to grow and major institutions push for mainstream adoption, so too will this issue of security become a constant threat to users and businesses alike.