The Brief on Breaches

In a shocking turn of events that feels like a never-ending horror movie, the crypto exchange world is under siege. In just six months, seven major exchanges have experienced security breaches that have led to the loss of tens of millions of dollars. Recent reports even confirm a hack on Bitrue, a Singapore-based exchange, whose wallet is now looking like Swiss cheese with $5 million missing.

Bitrue Hack: A Lesson in Crisis Management

June 26 was not a good day for Bitrue. They assessed a major gash in their security, with a thief making off with 9.3 million XRP and 2.5 million ADA. The official statement was brief: “A hacker exploited a vulnerability.” Sounds like they could use a stronger set of locks and a better security audit!

• Compensation is on the table for affected users.
• Authorities have been alerted, so the thief may want to think twice about spending that stolen cash.

GateHub: The British Bank Robbery of Crypto

On June 6, the UK’s own GateHub reported losses almost topping $10 million. They revealed that hackers invaded their space by obtaining valid access tokens—like sneaking through the security door with a stolen keycard. The company stated, “Through a well-orchestrated attack.” We get it, your hacker is very talented.

The Insurance Dilemma

Even the largest players can’t seem to avoid these breaches, as seen in Binance’s infamous $40 million hit. While it’s clear that exchanges are doing their best, could they follow the insurance model of traditional banks? Binance has come up with the Secure Asset Fund for Users (SAFU) offering a bit of peace of mind. But you still have to wonder: are they just putting a band-aid on a gunshot wound?

Communication: The First Line of Defense

Part of the problem here is communication. The crypto market has shaped up to be like a game of whack-a-mole where exchanges are trying to find stolen funds at the speed of sound. For the future of this business, it is crucial that crypto exchanges work together. One response would be creating a communication system to freeze suspicious transactions instantly. After all, the blockchain is transparent, so let’s use it!

Can We Expect Better Days?

As we trudge through 2019, it looks like we’re on the wrong path. Will the number of hacks fall next year or will we still be counting like competitor kids on a playground? With the right resources—insurance, stronger security measures, and inter-exchange communication—the tide might just turn. But for now, keep your digital wallets close, and your reliance on centralized exchanges, closer.