Everyone is wondering about the fallout from last weekend’s massive $530 million crypto heist. Will crypto buyers lose faith? Is strict regulation on the way? No one knows for sure, but here’s what we do know about what happened and, more importantly, what Cryptelo is doing to help prevent you from falling victim to cryptocurrency theft.
So what happened? Earlier this week, the popular Tokyo-based cryptocurrency exchange Coincheck admitted that hackers had breached its systems and stole digital funds worth over $530 million. Most of the losses were in the cryptocurrency NEM. According to Coincheck, the currency was stolen from a “hot wallet.” A hot wallet is an account that allows direct transactions on the exchange.
Here’s our word of caution: hot wallets are not the safest way to secure cryptocurrency. A hot wallet is an interim wallet, not a permanent storage wallet, and we advise you to use a hot wallet only when making a transaction. Exchanges as we have once again seen (remember Mt.Gox?) are vulnerable to attacks.
Unless you are making a transaction, your assets should be stored in a cold wallet, such as Trezor hardware wallet. While a cold wallet is safer than a hot wallet, there are still risks related to cold wallet storage. One of them is losing or forgetting your keys (those 15ish words that are your keys to your assets).
Protect yourself from crypto theft!