Bithumb’s use of crypto chilling storage wallets likely mitigated the potential damage. | Source: Shutterstock
$20 Million Bithumb Hack Exposes Alarming Threat to Bitcoin Exchanges
One positive takeaway from the event is that Bithumb stored most of the user funds in cold wallets that cannot be accessed by hackers and the price was limited as a result.
More importantly, stolen funds were reportedly sent to other exchanges, which can be salvaged if frozen immediately.
But, it remains uncertain how a company could prevent similar incidents from occurring in the future and impede insiders from engaging in malicious activities.
The company said:
“Bithumb exchange is certified ISMS and applied to multi-signature withdrawal connive. We constantly monitor and block external hacking. However, it was our fault that we only focused on defense of outside devour and lack of verification of internal staff.”
The exchange said that it would essentially overhaul its internal workforce verification approach and restrict the authority employees and contractors have over the internal management system used by the firm.
How Should Bitcoin Switches Protect Themselves?
The recent hacking attack suffered by Bithumb is not as serious as previous security breaches because alcohol funds were not lost in the process and the system of the exchange was not exploited.
But, it raises a new threat in the bitcoin exchange ecosystem, and in the near-term, outstanding cryptocurrency trading platforms will have to find solutions to prevent similar incidents from arising.