The unregulated realm of cryptocurrencies has been criticized for the security and safety of the funds that people invest in it. There were multiple breaches in the past to prove that cryptocurrency and blockchain technology can be hacked.
And it has happened again. A Singapore-based crypto exchange company has announced Monday that hackers have stolen an undisclosed amount of crypto money.
DragonEx, a crypto exchange company based in Singapore sent a message through Telegram saying that the company fell victim to a cyber attack and noted that cryptocurrency funds owned by users and the exchange were “transferred and stolen.” The company did not disclose the total value of the losses and the amount of the stolen cryptocurrency funds yet.
The breach was first discovered on Sunday, March 24, after the crypto exchange company took its platform offline saying it was upgrading its systems; before finally disclosing that it had been hacked yesterday.
“Part of the assets were retrieved back, and we will do our best to retrieve back the rest of stolen assets,” DragonEx said in Monday’s Telegram announcement. Coindesk first reported about the said cryptocurrency theft.
The crypto company further said in the announcement message that it had already informed authorities including judicial administrations in Estonia, Thailand, Singapore, and Hong Kong about the attack.
“We’re assisting policemen to do an investigation. All platform services will be closed, and the accurate assets loss recovery situation will be announced in a week. For the loss caused to our users, DragonEx will take responsibility no matter what.”
Earlier today, the DragonEx admins updated its users and provide wallet addresses for 20 cryptocurrencies to which the stolen funds had apparently been transferred. The list included the top five cryptos by market capitalization: Bitcoin (BTC), ether (ETH), XRP, litecoin (LTC) and EOS, as well as the tether stablecoin (USDT) for which six destination addresses were provided.
“We earnestly request help from all our fellow exchanges and other industry strength, please help us to investigate and traced the assets, freeze them and stop the assets flows,” the exchange said.
The admin added that stolen crypto assets transferred by the hackers to the Huobi and gate.io exchanges have already been blocked.
CRYPTO TECH IS HACKABLE
In the past man cryptocurrencies and blockchain technologies have been compromised either by hacking or sheer recklessness of the company. Virtual currency exchanges suffered at least five significant attacks last year. Japan has hosted two of the biggest known crypto hacks: the Mt. Gox debacle of 2014 and the theft of nearly $500 million in digital tokens from Coincheck Inc. last January.
An article published by the MIT Technology Review, a magazine wholly owned by the United States Massachusetts Institute of Technology (MIT), argues that the security-touted blockchain tech is still vulnerable to hacks and other attacks.
In the article, the MIT Technology Review stressed that the blockchain technology including cryptocurrencies is a complex economic system that is overly dependent on unpredictable human behavior. With this, the review pointed out that numerous security breaches and cyber attacks have been increasingly emerging in cryptocurrency and smart contract platforms. The review cited several incidents including the recent double spending vulnerability that was found on a significant U.S. crypto exchange Coinbase on Jan. 7.
“In short, while blockchain technology has been long touted for its security, under certain conditions it can be quite vulnerable. Sometimes shoddy execution can be blamed, or unintentional software bugs. Other times it’s more of a gray area — the complicated result of interactions between the code, the economics of the blockchain and human greed.”
Nonetheless, there are programs and rewards provided by blockchain and crypto companies to incentivize white hat hackers to report specific systemic flaw on a given platform. According to TheNextWeb, white hat hackers earned a total of $878,000 by identifying crypto bugs and deficiencies in 2018 alone. Just recently, Coinbase handed out $30,000 reward, the most massive bounty ever given, to HeckerOne for reporting a critical bug on its system.
There are also some incidents that security-touted technology becomes problematic aside from hacking. Recently, blockchain wallet Quadriga is slapped with a $200 million problem after their CEO and founder died without turning over intellectual resources like encryption data and passwords.
The death of QuadrigaCx’s CEO in December last year sparked an investigation on what happened to the funds that Cotten has allegedly placed in cold storage that the company is now unable to recover, leaving them with a multi-million debt.