Security Issues in the Crypto Industry

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Memeinator Coin

Security Issues in the Crypto Industry

By Benson Toti - min read

Two security compromises have occurred in the crypto industry over the last few days. The first involves a crypto exchange that was hacked by insiders, and the second is a Trojan malware that phishes users and exploits Android’s accessibility options.

Bithumb Is Robbed From the Inside

The first major event is that Bithumb, a cryptocurrency exchange, needed to pause deposits and withdrawals to their platform on March 30th. The exchange later explained that they had detected an abnormal level of withdrawals and needed to investigate for potential foul play.

Further analysis revealed that a significant amount of cryptocurrency had been stolen from their hot wallets. Their cold wallets were unaffected but approximately 3 million EOS (equivalent to $12.5 million USD) was stolen. This is the second hack that Bithumb has experienced in under a year.

A blog post published by the exchange went on to explain how this had been the work of employees of the exchange. All of the security measures in place were previously only designed to prevent external attacks, with little though having been put into attacks from the inside. The attack had the exchange begin to send EOS from its hot wallet to the attacker’s address.

As a result of this detection, security opted to move all their cryptocurrency into cold storage and blocked any further withdrawals, but the damage was already done at this point. There are other rumors that 20 million Ripple (a total of $6.2 million USD) was also stolen, but that is as of yet unverified.

Gustuff Tricks Users

The other piece of news about crypto-related security was that there is now a Trojan malware in circulation that targets the biggest cryptocurrency applications. This includes Coinbase, BitPay, Bitcoin Wallet, and several others, as well as the proprietary applications for JPMorgan, Wells Fargo, and Bank of America.

Hackers have long since identified mobile applications as the most vulnerable means of hacking users. People tend to be far less on guard on their phones, and will often take shortcuts since they are in more of a hurry. The result is that it has been easy for hackers to create phishing schemes that use web fakes and intelligently designed push notifications to con users out of their money.

The malware has been spread mostly over SMS messages containing malicious Android package file kits. Once loaded, certain pieces of data are overwritten, the “Gustuff” malware is able to exploit the accessibility features of Android phones and trick the user. The malware was reportedly designed by a Russian-speaking hacker who goes by the name “Bestoffer”.

Crypto Security Hurting the Industry

With news about the Quadriga CX catastrophe reaching the mainstream, it seems as if even after almost a decade of the crypto industry being in existence, security is still an issue. As a general rule, usually occurrences such as this result in a drop in the price of crypto, but for some reason, Bitcoin has led the way into a significant bull run.

As with most security, the best way to go about it is by managing your own and being careful about what you download. Both of the above compromises are easily avoidable on the part of a retail investor, assuming they follow good cyber hygiene.