Is Cybersecurity taken seriously in Crypto land?

Hacks and frauds are on the rise. Is the industry ready?

February 03, 2022

Contents:

  • 🔓 Is Cybersecurity taken seriously in Crypto land?

  • 👜 How to Secure your personal bag

  • 🏦 But what about Crypto exchanges

  • 👀 Under the Radar

  • 📰 ICYMI

  • 🙏🏻 Grateful for…

  • 💸 Coupons

Today we hear of yet another crypto protocol hacked. Wormhole, a protocol that allows users to move their tokens and NFTs between Solana and Ethereum, has confirmed that it suffered an exploit of 120,000 Wrapped Ethereum, worth over $320 million—higher than the $250 million originally suspected.

It seems like every other day we hear about a security breach in crypto land. Cyber criminals seem to be getting more sophisticated by the minute and appear to be ahead of the security measures taken by crypto and web3 companies.

🔓 Is cyber crime taken seriously enough in crypto land?

Well, it depends…

Cryptocurrencies and NFTs became mainstream in 2021, leading to the increase in the development and investment of DeFi and NFT platforms.

Following the spike of interest, the total value locked (TVL) across the cryptocurrency industry reached upwards of $230bn. This has also gotten the attention of cyber criminals who are knocking on unaudited DeFi protocols doors.

Last year the largest five crypto hacks amounted to about $1.3 billion in loses.

The Poly Network hack in August was the biggest cryptocurrency exploit ever, resulting in a loss of around $611 million, followed by BitMart who lost $196 million.

What we are witnessing today is a decrease in crypto related crime, but a substantial increase in DeFi related hacks, and NFT related hacks and scams are on the rise.

In 2019, crypto thefts, hacks and frauds surged to US$4.5 billion. That number dipped to US$1.9 billion in 2020, and the US$687 million figure recorded between January and July 2021 suggests that last year’s level did not surpass that of previous years. (Fintechnews)

👜 How to Secure your personal bag?

Some of the most common recommendations to keep your crypto and NFTs (and any account) safe are:

  • Be suspicious — If an offered deal looks too good to be true, it usually is

  • Do your own research — following the herd isn’t always the right call

  • Keep track of your transactions for suspicious activity

  • A secure password and device is your first line of defense

  • Use 2-factor authentication

  • Cross check links before clicking on them — guard against ‘phishing’ attacks

  • Secure the keys and Seed phrases

  • Use Cold storage if able.

🏦 But what about Crypto exchanges? 

How can they be safer and guard themselves against todays bank Robbers?

Steps to consider:

  • Test and audit smart contracts, hire red teams if necessary. There may be security glitches or errors during creation of blockchains and smart contracts. This may be more common with larger, more intricate blockchains.

  • Strong Code and code updates. - "What's clear from the majority of these attacks this year is that it's often a vulnerability that's being exploited," says Rebecca Moody, head of research at Comparitech. "With the industry growing at an exponential rate and relying on open source technology, this leaves platforms open to exploitation when hackers are able to find a weakness in the code."

  • Kill Switches - Developers can also build centralized kill switches into a network to stop all activity once a hack is detected. But for users whose money has already been stolen, it will be too late.

As the industry grows and more cybersecurity measures are developed and deployed, we hope to experience a safer environment. Perhaps some regulation may help since we have learned of many hacks that go unreported due to the victims fear of bad press and negative reputation. “They rather swallow the loss and not announce the crime.”

The cybersecurity industry is also expanding, company’s departments are hiring cyber security specialists are a higher rate than ever, and universities are offering a wide range of programs to prepare the future industry workforce.

In the meantime, as individual investors we need to take the necessary measures to protect our investments. And crypto/web3 protocols will have to take these cyber breaches more seriously because they are spreading very rapidly.

👀 Under the Radar

  • Hex (HEX) - HEX is designed to be a store of value to replace the Certificate of Deposit as the blockchain counterpart of that financial product used in traditional financial markets. HEX is also designed to leverage off the emerging DeFi (Decentralised Finance) ecosystem in cryptocurrencies within the Ethereum network.

  • Quant (QNT) - The goal is of connecting blockchains and networks on a global scale, without reducing the efficiency and interoperability of the network. It is the first project to solve the interoperability problem through the creation of the first blockchain operating system.

  • Hedera (HBAR) - The most used, sustainable, enterprise-grade public network for the decentralized economy that allows individuals and businesses to create powerful decentralized applications (DApps). Alleges to be faster and more stable that the competition.

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