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In a new report, crypto analytics firm Chainalysis has said that while crypto exchanges are ramping up security measures, hackers are also upping their game.
An excerpt from Chainalysis 2020 Crypto Crime Report has been made available. Based on the data, there were a total of 11 hacks on crypto exchanges in 2019 - the most in any year to date. However, none of the 11 attacks came close to the $534 million Coincheck hack in 2018, or the $473 million Mt. Gox hack in 2014.
The study counted the hacks involving the exploitation of technical vulnerabilities and attacks conducted through social engineering or other forms of deception. It only took into account the attacks on exchanges, not payment processors, wallet providers, investment platforms and similar types of services. Also, only the amount stolen that was measured and publicly confirmed made it into the data.
The report also indicated that the exchanges have gotten better in terms of security and in limiting the damage that the hackers can do.
“Exchanges have taken strides to better protect customers’ funds from hacks and the sharp decreases in amount lost per hack indicate they’ve been successful. Many exchanges now keep a lower percentage of funds in less secure hot wallets, require more withdrawal authorizations, and monitor transactions more closely for suspicious activity so as to catch hacks earlier,“ the report read.
The exchanges' willingness to come forward to report the attacks and share the details with the cryptocurrency community have made it easier to track down stolen funds. However, hackers have also become more sophisticated in carrying out hacks and in how they launder the funds they have stolen.
Chainalysis recommends that exchanges continue to improve their efforts for anti-hacking security and put guard rails to ensure suspicious transactions are immediately flagged before they are completed.
