In late June, 2018, the cryptocurrency market recorded a loss of over $17 billion over a 24-hour period, triggered by the loss of major cryptocurrencies such as Bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS. Among the largest of losses was EOS, having a loss of ten percent overnight, with the other cryptocurrencies falling by just over seven.
An article from CryptoCoins News reported that the recovery in cryptocurrency values was simply a corrective rally rather than a bull one. Mid-June saw the market return to a modicum of stability not seen in two months. That changed with the unforeseen hacking of Bithumb, South Korea’s largest cryptocurrency exchange, seeing roughly $31 million stolen from the exchange. Prior to the hack, the market had shown significant momentum, with Bitcoin recovering from $6,300 to $6,700, but with Bithumb being the third biggest cryptocurrency market in the world, investors have panicked, causing cryptocurrencies to go into a short-term decline.
After losing money from its hot wallet, Bithumb has started to cooperate with the Korea Internet and Security Agency (KISA), a subsidiary of the Ministry of Science and ICT, to cut its losses. The team behind Bithumb believe that the losses could decrease in the future as KISA and Bithumb security technicians initiate recovery efforts.
“As we undergo recovery process on each cryptocurrency, the overall scale of damage is getting reduced. Hence, we expect that the overall damage will be less than the amount we initially expected,” the Bithumb team said. Moreover, Bithumb’s company funds, valued at around $450 million, could be use to reimburse the investors with easy, since the stolen amount only accounted for six percent of the company’s funds.
A Possible Solution?
The deletion of $17 billion from cryptocurrency exchanges, in addition to the hacks at Bithumb and Coincheck, is indicative of how lax cryptocurrency exchanges are. Even if crypto exchanges are able to recover and reimburse investors, the solution is but a flash in the pan against long-lasting damage. Not only were investors’ money lost, but with people losing faith in cryptocurrency security, cryptocurrency values will fall, investors will lose money, and if nothing is done to secure cryptocurrency exchanges, those exchanges may soon fade out of relevance.
There is a need for a solution that can secure data in this nascent field. A solution that can ensure convenience while protecting against attacks. Data that is faster and safer.