$534 Million Cryptocurrency Hack in Japan: Major Security Concern?

Nearly $534 million has been stolen by hackers from a cryptocurrency exchange in Japan called Coincheck. This is the world’s largest-ever cryptocurrency theft.

Japan’s Financial Services Agency (FSA) is reporting that they told Coincheck to come up with increased measures to make sure this kind of attack never happens again.

Currently, other cryptocurrency exchanges are taking higher measures to make sure their exchanges never have to deal with something like this as well.

Tyler Moffitt, senior threat research analyst at Webroot, warns that cryptocurrency owners should be extra cautious about keeping bitcoin safe after this attack.

Ever since the historic bull run of bitcoin in 2017, the virtual currency has gotten a tremendous amount of attention from all walks of people including investors, traders and some criminal organizations.

This theft shows one major downside of trading cryptocurrencies, an asset that global policymakers are struggling to regulate. Clearly, all currencies have risks, but this could be cryptocurrencies largest flaw.

Coincheck said that it would return about 90 percent of all that was stolen with their own internal funds. However, the details of when and how this would happen were not disclosed.

If a cyber attacker gets your tokens, they typically move them to a crypto exchange and launder them out by buying out a token based on a private blockchain ledger.

Some more information on the hack:

Historically, there as always been skepticism over the anonymity of private blockchains because they don’t actually record and track all transactions. The addresses are hidden to prevent external scrutiny.

According to experts like Tyler Moffitt, a senior threat research analyst at Webroot Internet Security, it is especially important to keep your bitcoin safe in the form of wallet providers and safe crypto exchanges. A popular token used by crypto-stealers is the cryptocurrency monero.

“Monero is basically bitcoin, but it is a private ledger. You never know who sent what and where and for most coins on the blockchain you can see the X address and the Y address,” said Moffitt.

Bitcoin has recovered from the selloff on Friday, mostly due to Coinchecks assurance that customers would be partially reimbursed. However, market observers claim that these crypto exchanges are likely to see security lapses in the future.

If these security problems keep persisting, many claim that more centralized platforms could be on the horizon.

“The latest theft will have two immediate effects: more regulation by authorities over exchanges and more recognition of the advantages offered by decentralized ways of trading,” said David Moskowitz, co-founder of Indorse Pte in Singapore.

The hacking has created lots of buzz on all social media platforms:

 

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