Crypto Exchanges Lose $731 Million In 2018. Can Hacks be Barred?

Blockchain security firm CipherTrace recently confirmed that during the first half of 2018, $731 million worth of cryptocurrencies were stolen from crypto exchanges.

In 2017, crypto exchanges made about $266 million in losses due to security cracks and robberies. The first half of 2018 recorded triple the number stolen from crypto exchanges in 2017, creating tension among investors in the cryptocurrency space with regards to the standard of security measures used by crypto trading platforms.

Two of the largest crypto exchange hacks in 2018 were the stolen $500 million Coincheck hack in Japan and the $40 million Coinrail hack in South Korea. Both exchanges had huge amounts of crypto assets in their hot wallets, or wallets related to the internet, rather than cold wallets stored offline.

As a result, as soon as hackers have access to the system of Coincheck and Coinrail, they were instantly able to get hold of hundreds of millions of dollars in cryptocurrencies without any obstacle.

After its hack, Coincheck revealed that its $500 million security hack was due to lack of enough talented and experienced developers working on the platform’s security systems.

Coincheck CEO Koichiro Wada noted in an interview that:

“We were aware we didn’t have enough people working on internal checks, management and system risk. We strived to expand using headhunters and agencies but ended up in this situation.”

Yet, the statement was announced following a controversial press conference in connection to the hacking attack that triggered investors to fury over the firm’s behavior about its infrastructure. Only days following the hack, Coincheck held a press conference to outline the firm’s future and the method that will be used to handle with the hack.