Crypto exchanges have to learn and improve on their security

[Text]

As they say, there's no perfect system. When security is enhanced or improved, hackers and scammers also find ways to bypass it, so they evolve as well. There's another point to consider – those who create anti-virus are the ones who make viruses, does that make sense?

What's more concerning than stolen assets is our data, our personal details, and our bank accounts. Because we can become victims of identity theft. If only coins/tokens are stolen from exchanges, they can possibly be recovered and compensated. But the KYC information we've submitted is now in their hands, and that's a different story.

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[Crypt0Gore]

KYC can't reduce fraud activities on crypto exchanges because they are automatically centralized, whatever is going om in any centralized exchange are not hidden, they can be traced, ok why hasn't KYC helped with the FTX case? The only thing that KYC does better is prevention from criminal activities by the exchange users, maybe laundering money using the platform?

The Huobi attack is not a direct attack, because I have some money on the exchange when the hack happened, not a single cent of money was removed from my balance, as I went deep into more research, I came to understand that the hacker deceived the exchange users by pretending like the real huobi services.

CZ vows to get to the bottom of the this and he is starting to use his own security teams on this attack already, lets see how this will turn out, nothing in the crypto space is completely impenetrable, we only have to keep our heads up and prevent stupid mistakes from our sides.

[Cookdata]

I know people who are still dubious about the cryptocurrency sector because they worry about losing their money to scams or security breaches, which has been a typical occurrence in this market.
Since the majority of users appear to have welcomed the requirement for required KYC, I believe the focus should now be on enhancing exchange security.

There are many valid reasons why centralized exchanges are not the best to live your coins, in short, an exchange is not a place to keep your coins, as the name implies, "exchange" which means to trade and not custodial but people are so daft to believe usernames, emails, strong password and 2FA is enough to give them high-level security, only a newbie that understands nothing about security and centralized exchanges will believe such cooked lies, your coins are not stored on exchanges but their own personal wallets while they only control the front end to have data of what is really going on in the exchange.

There is no security that is more secure than personalized one, centralized exchanges will remain the same because they have junks of money across different chain which always raises eyebrows from hackers, even if there is a high level of security, their privacy are low which make them vulnerable to attacks, people will always want to know where there coins and tokens are kept, this alone zero the level of privacy and the teams knowing much about the security details also makes them vulnerable to attack even if there is high level of security.

I am aware that KYC may reduce fraudulent activity, however dealing with hacking and security exploitation issues will need investing in the strengthening of security. Adoption could happen quickly with sufficient protection because safety will be assured.

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

Even though there are still very few trading platforms that have never experienced security exploitation, the recent incident with Houbi should serve as a reminder for everyone to remainattentive and prioritize their security.

Do you know the advantage of entrusting private keys to yourself, its because when you did the back and storage offline, nobody in this life except you alone knows how and where you kept and that makes you safe(if you did it professionally) but when two or more people do that, even with multi-sig, it gives room for suspicious of others, anyone can pull tricks just to outsmart the other person, and that is the problem of centralized exchanges, there is always backstabbing.

You see that Houbi hacked that just happened, it is not the first and neither will it be the last because centralized exchanges will always be open to mistakes as far as its organogram is concerned. Not your keys, not your coins.

[bakasabo]

The other side of the coin is - no matter how well crypto exchange improve their security, there is a chance that their CEO or other high management will perform exit scam. No matter how secured exchange is, your money still are not safe. Crypto exchange have to learn a lot, but users have to learn even more. Even if crypto exchange has most up-to-date security, user with one careless move would  throw that security to dumpyard.

[Best-mary]

I know people who are still dubious about the cryptocurrency sector because they worry about losing their money to scams or security breaches, which has been a typical occurrence in this market.
Since the majority of users appear to have welcomed the requirement for required KYC, I believe the focus should now be on enhancing exchange security.

I am aware that KYC may reduce fraudulent activity, however dealing with hacking and security exploitation issues will need investing in the strengthening of security. Adoption could happen quickly with sufficient protection because safety will be assured.

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

Even though there are still very few trading platforms that have never experienced security exploitation, the recent incident with Houbi should serve as a reminder for everyone to remainattentive and prioritize their security.

Yes, I agree with you OP. Exchanges should go the extra mile to protect users' funds. Like the article, I just came across and I am very impressed with what the exchange is doing. They are actually increasing the level of their security

[so98nn]

We should learn one more thing, have you ever heard or read news about forex exchanges that got hacked to this much gravity? I hardly think so. May be couple of cases due to human negligence or internal corruptions bu that too traceable considering they are having trail of centralisation. So why this is happening to crypto exchanges only? May be its more easy to get hacked and as OP stated they have very weak security aspects all the time. They also have KYC but they don’t have that much safety of their sites.

May be they have chance to state that we got hacked and now the money is lost because it was transferred by unknown bitcoin address and now there is no way to reverse it.

Sometimes it’s more fishy and looks like they do it intentionally.

[Asiska02]

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

Before the attack on Houbi, many other exchanges have been hacked before even the biggest exchange binanace have faced some potential hack before last year. If Binance can face such attacks, then I see no exchange that can escape that. In light of all this hacks, it is important that the security of such exchanges be improved to avoid those hackers of escaping with this monies hacked from those exchanges. Depending on how your technical team and security system of your exchange is, funds can be frozen immediately as in the case of Binance when it happened last year.

Even though there are still very few trading platforms that have never experienced security exploitation, the recent incident with Houbi should serve as a reminder for everyone to remainattentive and prioritize their security.

Online exchanges are prone to attack at anytime that is why it is always advisable not to keep too much of your funds in those centralized exchanges. Only keep the little you want to use at that time in such exchange or don’t keep any there, but transfer there only when you want to exchange them.

[Taskford]

I know people who are still dubious about the cryptocurrency sector because they worry about losing their money to scams or security breaches, which has been a typical occurrence in this market.
Since the majority of users appear to have welcomed the requirement for required KYC, I believe the focus should now be on enhancing exchange security.

I am aware that KYC may reduce fraudulent activity, however dealing with hacking and security exploitation issues will need investing in the strengthening of security. Adoption could happen quickly with sufficient protection because safety will be assured.

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

Even though there are still very few trading platforms that have never experienced security exploitation, the recent incident with Houbi should serve as a reminder for everyone to remainattentive and prioritize their security.

They know how to secure their exchange its just hackers became more smarter than them that's why we see this hacking issues existing even if the exchange spend a lot of money for security measures. What's important matter there is we choose a big exchange when trading so that if this incident will happen to them they can give some assurance that no investors funds will get affected and all users can still access their funds without any issues.

Not only Houbi encounter such unfortunate attacks but rather also those top tier exchange like binance but what good happened there is they still standing strong and can able to operate even if issue like this happen to them. Its important for trader to be aware on this situation so that they may know on what to do next if situation like this might occur in future.

[Altryist]

They know how to secure their exchange its just hackers became more smarter than them that's why we see this hacking issues existing even if the exchange spend a lot of money for security measures. What's important matter there is we choose a big exchange when trading so that if this incident will happen to them they can give some assurance that no investors funds will get affected and all users can still access their funds without any issues.

Not only Houbi encounter such unfortunate attacks but rather also those top tier exchange like binance but what good happened there is they still standing strong and can able to operate even if issue like this happen to them. Its important for trader to be aware on this situation so that they may know on what to do next if situation like this might occur in future.

Exchanges will always experience increased risks due to their type of activity, they will always have vulnerabilities and hackers will try to repeat their attacks. To some extent, along with the increase in security, the capabilities of hackers also increase and it is impossible to take everything into account, sometimes protection can only be strengthened when you see where the vulnerability was.

In fact, I don't know if there are any exchanges that have never been hacked. What is important here is how quickly the defense service can react so that losses are minimal.

[kingvirtus09]

You know the hackers are also his enemies; they are also hackers. The only difference is that good hackers use their skills in the bad plans that hackers do. That's why, on the well-known CEX platforms, the ones they hire as protectors of their platforms are the people who have the ability to block or suppress bad hackers.

Now, the bad hackers are not only focused on the CEX platform but also on the DEX. As long as they have a chance to enter, they will attack it unexpectedly. So it can't really be said that KYC is an assurance that your assets are really safe on an exchange. But even so, that depends on the quality of security that an exchange still has.

[Blitzboy]

I totally get your worries about crypto security? Totally get it. Its real, the fear. People, me too, are on edge. Scams? Hacks? Big, real threats. Just like that Houbi mess.

KYC? Its doing something, at least. Cutting down the bad stuff. But yeah, gotta jack up that security. Make it strong, unbreakable. People want to feel safe, right? If they do, boom! Everyone’s gonna want in. Cant just be tech-smart, gotta be safe-smart too.

KYC might be a pain, sure. But hey, its moving towards safer grounds. Time to shout out for tougher exchange security. No more waiting. No more Houbi-like wake-up calls. Time to move, and move now. For the sake of our assets, our peace. We need it, bad.

[tjtonmoy]

Exchanges are just a huge target for hackers, scammers and even governments, so anyone that wants to use them should do so with a very clear intent, which is to buy and sell whatever they need and then send their coins out of the exchange.

Such a thing should take just a few minutes and this will reduce the chances of losing your coins dramatically, however very few people do this as they prefer to save themselves a few dollars and keep their coins in their favorite exchange, not understanding the massive risk they are taking by doing this.

Buy-sell is not the only thing you do in exchanges. It is a useful thing but most people use centralized exchanges in order to trade. As you might have already guessed, it takes time. One open trade could stay open for weeks to months. In this situation, centralized exchanges are needed. You are required to keep your assets in them if you wish to trade. So in some cases, we are bound to keep our assets in those platforms. But that's just it. You should never keep anything extra than what you need.

Other things could be done using a decentralized platform. And guess what, now decentralized platforms are available for future trades too. We should move to those platforms. But as everything is connected to the internet, nothing is safe. So we need to protect ourselves in our own ways.

[Woodie]

I know people who are still dubious about the cryptocurrency sector because they worry about losing their money to scams or security breaches, which has been a typical occurrence in this market.
Since the majority of users appear to have welcomed the requirement for required KYC, I believe the focus should now be on enhancing exchange security.

Imo I think KYC should just be scrapped off altogether because firstly user data isn't usually handled well and secondly 2fa and email verification should be enough security & proof to show you own an account incase of a breach.

Besides, users aren't getting hacked, it's the exchanges themselves which need to work on enhanced security measures!

I am aware that KYC may reduce fraudulent activity, however dealing with hacking and security exploitation issues will need investing in the strengthening of security. Adoption could happen quickly with sufficient protection because safety will be assured.

With fake docs flooding the internet, I don't think KYC will reduce fraudulent activities, the best is having geolocks, IP whitelisting, and possibly phone number & sms verification as these might work better than KYC which removes the potential of exposing user data to unauthorised users.

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

Even though there are still very few trading platforms that have never experienced security exploitation, the recent incident with Houbi should serve as a reminder for everyone to remainattentive and prioritize their security.

Perhaps these exchanges need to talk to each other more to learn something from each other in regards to best security measures of not getting hacked.

[GbitG]

The latest Houbi attack, which resulted in the theft of roughly $8 million worth of Ethereum, and a few other security exploitations of a similar nature on other trading platforms in the past don't bode well for the sector, which calls for the prioritizing of security. https://cointelegraph.com/news/huobi-global-crypto-exchange-hacked-report

It's not new that exchanges like Huobi have experienced attacks resulting in millions of dollars being stolen. Such incidents continue to happen regularly, and when we look at the past, there are numerous significant and well-known exchanges that have faced security breaches. Even top exchanges are targeted by cybercriminals.
These hackers often target exchanges because they have open-source code libraries, making it easier for them to exploit vulnerabilities and compromise the assets of thousands of users. Therefore, taking additional security measures is essential because these incidents are on the rise and lead to more complexities in dealing with illegal activities.
Additionally, I have a list of all the hacked exchanges due to their vulnerabilities that have fallen victim to such incidents. Here's the list for reference:
10 Biggest Crypto Exchange Hacks
1. Mt. Gox (2011)
2. KuCoin (2020)
3. Upbit (2019)
4. BINANCE (2019)
5. Bitfinex (2016)
6. CRYPTOPIA (2019)
7. ZAIF (2018)
8. BANCOR (2018)
9. COINCHECK (2018)
10. COINBENE (2019)

[The Cryptovator]

Scam and hack aren't the same thing. We are facing crypto hacking on the exchanges, and users have been suffering for that. I feel exchanges are using some security features to protect their funds. But hackers have been able to break their security system. Even the biggest exchange, Binance, also faces hacking issues. I don't think it's possible to prevent it completely. Because even if you use the most advanced security features, hackers will try to exploit them. Until you keep automating withdrawals, it's hard to prevent attacks. On the other hand, large numbers of withdrawals are impossible to handle manually. Exchanges need to struggle to find something where hackers are unable to break the security system; for example, hackers won't reverse Bitcoin transactions.

[tabas]

Many times exchanges have always been targeted since they're like honeypot in the eyes of the hackers. I do believe that they are investing in security but it's probably like that it's not just enough to protect themselves and their customer's money. Maybe there's just a point of time that the hacker just seen a very small hole and opportunity and able to get in through that. Sometimes, these hacks could be a collaborated job done with the help of some of their employees that has access to the critical part of the operations, I dunno but that's possible. While they're taking hundred of millions of deposits to billions on their volumes, I do think that they're doing regular routine of checking everything related to their security.

[Obari]

Over the pass, there have been several warnings about using centralized exchanges and anyone using it, is doing so at their own risk and that is why it has always been advised that our funds shouldn't be stored on exchanges but rather be used for it's purposes of exchange.
I agree with you op about exchanges investing more on security because there definitely so much to loss if security isn't taken as a priority.
But on the other hand, I think alot of these exchanges are already doing so much to handle their security sector and I really wouldn't blame them because these scammers and criminals will never stop doing their best to steal and stile at any slightest opportunity they get.

Most times I wouldn't have to blame these exchanges but rather blames those who get scammed on their platforms because at the end of the day you'll noticed that they at some point failed to follow instructions and maybe traded outside of the exchange or clocked on a random link and these things have been warned against even on the exchanges and I'm actually saying this from my personal experience with paxful after been scammed.

[Taskford]

They know how to secure their exchange its just hackers became more smarter than them that's why we see this hacking issues existing even if the exchange spend a lot of money for security measures. What's important matter there is we choose a big exchange when trading so that if this incident will happen to them they can give some assurance that no investors funds will get affected and all users can still access their funds without any issues.

Not only Houbi encounter such unfortunate attacks but rather also those top tier exchange like binance but what good happened there is they still standing strong and can able to operate even if issue like this happen to them. Its important for trader to be aware on this situation so that they may know on what to do next if situation like this might occur in future.

Exchanges will always experience increased risks due to their type of activity, they will always have vulnerabilities and hackers will try to repeat their attacks. To some extent, along with the increase in security, the capabilities of hackers also increase and it is impossible to take everything into account, sometimes protection can only be strengthened when you see where the vulnerability was.

In fact, I don't know if there are any exchanges that have never been hacked. What is important here is how quickly the defense service can react so that losses are minimal.

Not surprised about those attacks happened since many know that they have huge funds stored in their platform that's why they are the favorite target of hackers. This is the reason why we need to consider this topic since this hacking incident really exist and its good to choose the right platform with huge connections since if anything happen to them just like what happen on binance they can mitigate the attack and can make sure that funds is safe then they can return all of it to their site site users. I think all major exchange experience this hacking issue some of them survive the attack and some of them totally fall down because of financial issues happened after the attack they encounter.

[ektotanes]

Crypto exchanges will never be able to become 100 percent secure. It's just not possible, since it's an online site.

[TimeTeller]

Scam and hack aren't the same thing. We are facing crypto hacking on the exchanges, and users have been suffering for that. I feel exchanges are using some security features to protect their funds. But hackers have been able to break their security system. Even the biggest exchange, Binance, also faces hacking issues. I don't think it's possible to prevent it completely. Because even if you use the most advanced security features, hackers will try to exploit them. Until you keep automating withdrawals, it's hard to prevent attacks. On the other hand, large numbers of withdrawals are impossible to handle manually. Exchanges need to struggle to find something where hackers are unable to break the security system; for example, hackers won't reverse Bitcoin transactions.

These exchanges should always update their security features because hacking tools are also getting sophisticated.
So their security team should be ahead of the game when it comes to this aspect of their business.
They may incur good amount of money but it will probably save them from potential bankruptcy because of these illegal actors in cyberspace.
As you mentioned, even binance is no exception. But I highly believe, they have very good security system to counter attack possible threats.