Hacking of Crypto Exchanges seems more common than ever. The most recent incent occurred in South Korea. Coinrail had $40 Million in coins stolen which accounts for 30% of all their accounts.
The hack sent the price of Bitcoin and other cryptos into a freefall. It also sparked Japanese regulators to take a closer look at their exchanges and their security practices. Japan’s FSA instructed the largest exchange to suspend accepting new registrations until it’s security issues are addressed.
Cryptocurrencies hold a great deal of promise and potential in their respective applications. For now, their primary purpose is speculation, and that is why all of the focus and resources need to be directed to the exchanges and their security practices. It is evident that at this point those that are operating these exchanges are either not capable of dealing with the security threats nor they are unwilling to implement what is needed.
One example of this was one of the most infamous hacks Mt Gox where nearly $400 Million in Bitcoin over an extended period. The CEO Mark Karpeles was known for his pathetic operations of the exchange and ignorance concerning security. It is highly likely that regulators must step in enforcing protection or shut down these exchanges. Security and implementing protection is where cryptocurrency regulation is most needed.
Over $600 Million of crypto was hacked to date. For cryptocurrencies to regain any momentum with the public and the awaited introduction of more institutional investors specific protocols including a more significant percentage of cold wallet storage adding bank-level security. While there is no certainty hack won’t continue their frequency will be dramatically reduced and bring back the confidence of cryptocurrency traders.