Cryptocurrency Exchange

New Zealand’s Cryptopia Hack Sees $3.2 Million Liquidated Via Crypto Exchanges

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BLockchain data company Elementus has openly stated that at least $3.2 million of the Cryptopia hack stolen crypto has been settled thus far.

“Cryptopia update as of this morning, the hackers have liquidated $3.2m in tokens, with the bulk of that going to Etherdelta.”

On January 15th saw the initial report from Bitcoinist about the security breach, stating only that ‘significant’ losses were had. It was revealed almost two weeks by Elementus that the attack was ongoing with 17,000 wallets drained of 1,645ETH throughout the Cryptopia exchange. Some hacked wallets continued receiving funds even as they were being compromised. It was later concluded through blockchain data that some users continued depositing into their Ethereum wallets even after Cryptopia lost control to the hacker(s).

The exchange has since remained silent on the matter. All cryptocurrency wallets have a basic construct of private and public keys. Public keys are like a user’s bank account and can be freely sent to anyone paying that address. Private keys that are safeguarded in a number of ways are known only to a user and never given out. This two-part authentication or validation is intrinsic to all wallets.

A hot wallet can be an online wallet, a desktop wallet or a dapp. All of these sit behind a device’s firewall – the phone or PC’s security is all that stands between a user’s funds being secure or lost. A cold wallet can be a desktop wallet installed on a standby, disconnected machine or a hardware device.

A hot wallet is typically a user’s exchange wallet. Hot wallets should only ever contain a small percentage of digital assets, with the remainder being stored offline or cold. Cold wallet apps offer heightened security in a variety of ways, but simply put, while they can obviously be linked to a hot wallet to enable transacting, they are fundamentally “offline.”
With the CEO engaging in this conversation further by saying:

“It’s quite easy to generate a brand new address. We (and no one) recognize every transaction out there. We already have very in-depth and detailed blockchain analysis.”

According to an official press release, the SEC has taken action against the founder of digital token trading platform EtherDelta, Zachary Coburn.

According to the Commission’s order, EtherDelta constitutes an online platform for secondary market trading of ERC20 tokens — most of which are usually issued through an initial coin offering (ICO). Furthermore, the SEC has found that almost all of the orders which have been placed through the platform have taken place after its 2017 DAO Report. According to it, certain digital assets, DAO tokens included, are considered securities and, hence, their trading is subject to the Commission’s requirement that exchange register or qualify for an exemption.

It is worth wondering why centralized exchanges continue to thrive (or were even made at all) if they are unable to stop the most predictable problem while capitalizing on a decentralized product.

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