In 2021 the cryptocurrency space will need to up its security infrastructures to avoid mistakes made in 2020 and the years before. The year 2020 saw the price surge of BTC (Bitcoin) and other altcoins. But many businesses, users, and investors also suffered because of the lack of better security measures within the space. Companies lost millions as customers lost faith in the crypto companies.
According to reports, cybercriminals made away with $ 1.4 billion from crypto-related crimes. If only the companies that fell victims had invested in the necessary security features, some of the hacks could have been avoided. Notably, there is an urgent need to invest in modern technology and infrastructure to have a guarantee in securing digital assets. One way to improve the security of the systems is to modernize the crypto security infrastructure and make the necessary changes to ensure that traders and investors can do their transactions safely and efficiently.
Here are some of the leading hacking events in the past and how they could have been prevented through investing in better security systems:
The Okex Withdrawal and Freezing
In October 2020, the investors could not make withdrawals from the OKEx exchange platform for about one month. It was communicated to the customers that police investigation on one of the key persons in the organization kept them away from accessing the company. Also, the signing was prevented and the authorization process from getting fulfilled, which rendered the access to funds impossible. OKEx is a platform that investors use to make significant investment decisions. But when an individual got compromised, all the functionalities were disabled for more than a month, which is not acceptable. The main reason was the inflexibility of the security policies. Even though blockchain transactions and procedures are largely secure, it is critical to have the right approach since the rigidity can bring disasters that eventually lead to huge losses.
To deal with such occurrences in the future, it would be vital to invest in infrastructure and policies that allow flexibility if needed without putting the investors’ fortunes at stake. A policy that allows several people to do the signing and independent approval of transactions are essential. If only the organization had such kind of policies, it still would have been able to operate even in the key person’s absence.
Nexus Mutual Breach Which Leads Loss Of $8 Million
The malicious hackers were able to access the personal device used by the company’s CEO and installed a compromised version of the MetaMask. This has led to a signing and a transaction amounting to $8.2 to the hacker’s address. The concern here pertains to the local run wallets. The wallets cannot provide an out of band policy engine, and thus there was no way to verify the address before the money was transferred to the hackers. Though the amount didn’t comply with the issuer’s policies in any way, the main flaw was that there were no additional approvals for the transaction to take place. Adding a third party to control the transactions can be a more flexible yet secure approach to address the risks. This is particularly essential to reduce local manipulation of the system and counter future risky experiences. In case a provider is breached, there is additional verification needed. This will provide the company with several ways to defend its infrastructure.