After a record-breaking $1.3 billion was stolen from cryptocurrency exchanges last year, you’d think customers and those working in the industry would have learned their lesson. Sadly, it seems many more tragedies like this are going to have to unfold before there is a large scale migration toward non-custodial crypto swapping solutions. Let’s take a moment to review what’s happened so far in 2019, and show you how to protect your assets by maintaining true ownership of your money.
2019 Exchange Theft & Losses So Far
Cryptopia: This New Zealand-based exchange rang in the new year with a January hack that resulted in over $3 million being stolen — nearly 10% of their total assets at the time. Both deposits and withdrawals were frozen and have only recently reopened.
Bithumb: Popular South Korean exchange Bithumb recently made the news for when over $19 million in EOS and XRP was stolen. What makes this case especially disturbing is that apparently this was not the result of an outside attack, but rather theft perpetrated by individuals within the company. According to the statement released by Bithumb, an internal investigated pointed to an “accident involving insiders”.What’s scarier? The hacker working around the clock to break into exchanges and take your money, or the idea that employees who are supposed to be protecting your finds might be the ones taking them?
Quadriga: This was once Canada’s largest exchange, but it has experienced a turbulent past few months which has left a lot of customers hanging. This story actually begins in December of last year, when the CEO of QuadrigaCX (the company behind the exchange) suddenly died. He ran the exchange from an encrypted laptop and is believed to be the only person who knew the passwords and private keys necessary to unlock almost $200 million in user funds. The problem of how to handle the compensation of Quadriga customers continues to this day.