Bitcoin Forum

Video Covering the hacks: https://www.youtube.com/watch?v=OAktOcT1Mrs


Binance and BITPoint lost over $70,000,000 in hot wallet hacks in 2019. Although the money will all likely be paid back to users, what do you think about exchange security? Do you think there is a certain standard for protection that all exchanges should have?

We don't see Coinbase getting hacked, so are exchanges just not being as careful?





I think there needs to be a higher standard and hopefully, in 2020 we will see less of these hacks, that are actually avoidable.

If you set protection level standards (usually this is imposed by the law), this would mean that some of the companies will use just the minimum standards and that's it. Moreover, as they meet the obligatory industry measures, it would be pretty easy to just to stay with the minimum, get insured (as meeting the obligations as required by the law) and pay its users from the insurance, while overall safety standards usually will not be increased...as long as legislator would require.

I not heard about Binance ever loss more than $70,000,000 in their exchange assets because right now Binance keep exist as market trading and investing until today, how ever if loss raise more than $70,000,000 I think will make some exchange market loss their asset and never exist until right now, with higher amount loss in market bad reputation for this exchange at the future.

Correction: We don't see Coinbase getting hacked yet.

Every centralized exchange is at risk of being hacked. Individual Coinbase accounts have absolutely been hacked and drained many times. Coinbase themselves have been targeted in the past. The most notable attack (https://www.coindesk.com/coinbase-says-it-foiled-a-sophisticated-hacking-attack) revealed they have pretty poor security practices, with members of their staff opening links they had been emailed and downloading malware on to Coinbase's servers. They were very lucky to not lose funds. It's only a matter of time before they do.

The majority of exchanges have been hacked in the past, either for coins, customer data, or both. As I said, it's only a matter of time before the next attack, and only a matter of time before every exchange is hit. The only way to be safe is for the community at large to move away from centralized exchanges which hold your coins and demand KYC, and move to decentralized exchanges where you are in control of your own coins at all times, and there are no KYC requirements.

I believe all major exchanges follow a standard protocol. However, crypto exchanes are a very new industry and no benchmark has been set yet by any concerned authorities. The industry is growing at a rapid rate and new challenges are being surfaced every now and then! I am sure it will eventually come to a standard protocol but will take some more time to materialize!


I really hope so as well. But apart from cyber security, I think every exchange must start following the SAFU model of Binance. A certain percentage of fees must be kept separately to create an emergency fund which will come handy during such unfortunate time! This is called risk management and Binance has done really well there!

I don't think it's possible to make sure that hacks don't happen, but it's not like exchanges don't work on their security. They're not interested in getting hacked, because it damages their reputation as well as deprives them of some profit, so I suppose they're doing their best. Perhaps these hacks don't happen that often, really. Is it possible to make a comparison with fiat bank robberies? I can't find the relevant info online, but I can see those multi-million robberies occur.
From a customer's standpoint, it's good to use an exchange like Binance which will provide full compensation even if the hack happens. And, of course, it's never a good idea to store money on an exchange anyway.

is there anyway those exchange scammed those money and tried to cover up the issue with the hacked news because it just became an trend!
its like every exchange is made for hack and lets make up an issue and steal the money!

There are hundreds of large and medium sized cryptocurrency exchanges out there and a handful of them get hacked every year. But in my opinion, the frequency is declining now. The amount being stolen is also going down. For example, the Mt Gox robbery resulted in a loss of close to $600 million (would be $5 billion at current exchange rates). The figures given by the OP looks minuscule when compared to that.   

The year served to be a big year for cryptocurrency in terms of more new exchanges getting launched. This has also led to more hacks and scams getting promoted through these exchanges and more hackers stealing big funds through security breaches that occurred with the exchanges. But this didn't affected the market much as Binance one of the leading exchange took responsibility for the hack that took place in their exchange and settled funds to the users.

Different exchange different security hole. Binance despite already making a bug bounty program that rewards people who found bug with decent amount of money still got hacked, it just really depends on how the exchange was designed and whether the security is really good. so, comparing two exchange in term of security is kind of abstract and no obvious parameter.

You cannot repeat it often enough the importance of storing your coins and tokens on a wallet you personally own. Don't leave them on exchanges. There is no 100% guarantee that an exchange is not getting hacked. Protect your coins and store them safe!

It happened once or twice may be but the whole team was not into the idea of scamming but only few authorized people.

Whenever we come across a hack news, we start talking about decentralized exchanges for a week and then everything back to how it was.
I think we need more decentralized exchanges or at least ways to make the present one working better than how it is right now.

I've just remembered when binance get hacked through, and that was probably because of the less care of Binance team. However, everything related to the internet can be hacked so even if it's really so secure it doesn't mean that it has like 100% protections over the hackers, but it's better to higher security levels in every exchange to pretend those hacks which can be affected many sites and make em lose a lot of money.

Some of these exchange hacks have come from inside - so vetting your staff and making sure that you have rules about large amounts being moved and algorithmic checks to detect anomalies is crucial. But of course that all costs money to set up.

Even if everything happened from the inside, there are still better ways to hold internal controls.

You just posted up into this thread without bothering yourself on whats "lost amount" we are talking on here.Im sure you are just reading the topic title and not the op's contents.
We are pertaining or do talk about the amounts that been hacked in Binance and Bitpoint.

https://www.wired.com/story/hack-binance-cryptocurrency-exchange/
https://www.coindesk.com/japanese-exchange-bitpoint-hacked-by-32-million-worth-in-cryptocurrencies

I dont trust any exchange when it comes to 100% security. Just dont leave your coins on exchange  to avoid potential loss.

I mean, I don't doubt that exchanges like Binance have robust security measures in place already.

They likely do, and they enforce it to their best ability. However, there will always be exploits especially when you have such a huge target like an exchange which holds irreversible payment methods. Hackers are inevitably always going to be on your back.

And this statistic isn't even comprehensive, it doesn't cover the smaller exchange hacks or losses. The real figure should be substantially larger.

But how come an exchange like Coinbase hasn't had this done to them? Don't you think Coinbase is following a better process/structure for security?

One of the reasons that leads to hack the platforms is the developed team. In many cases, the team either steals money to declare bankruptcy or one of the individuals cheated the rest of the individuals.

It is the weakness of the laws, legislations, and controls imposed by governments that encourage such behavior, so I think it is more economical than technology.

Well said because even how tight the security is, if one of the personnel or part of the team tend to do shady acts then its useless.

We already seen big hacks but it do always end up on having the same reason which their security had been compromised.We saw some different
scenario just like what happened on quadrigacx.

If this is the case then it is a problem with internal controls, which should be set by the company. Nowhere in the world is it legal to steal. So companies need to adapt security protocols that an exchange like Coinbase has. They have been without hacks because they have good internal controls to prevent such things.


We can build better tech, but if we don't have good internal controls we are screwed.

What does everyone else think about this? Do we need better security standards to make sure that this does not happen?

He referred to 2 exchanges not one, Binance and Bit. According to the news received $40million was lost on binance and I guess the other exchange added up to the loss of $70 million. The hack did not affect any customer because it was from the hotwallet, holding binance coins. I think the safety of the users is still responsible for the trust on the exchange till now.

I agree with you.. there are some users who are lazy to store their coins in a private wallet, they feel more comfortable storing in an exchange wallet, even though wallet exchange is very vulnerable to hacker attacks.  storing in a personal wallet is much more troublesome but still the safest!!

Whats the troublesome of it? It doesnt really cost an arm and leg for you to store up your coins on a hardware or personal wallet.
It might just really require you to spent some when it comes to fees but at least you do know the safety of your coins.
People never really learn until they do experience loss of funds.Wont be surprised if there are exchanges as of this 2020 will be hacked.

We can't expect everyone to take care of their own funds. We need to realize this and move on, by making exchanges hold more security.