Crypto experts believe the unending hack incidents are damaging the industry’s reputation.
Earlier this week, cryptocurrency exchange HTX, formerly Huobi, lost roughly 5,000 ether (ETH) worth $7.9 million to a hacker. The attacker had compromised the exchange’s hot wallet and siphoned the assets in one swipe.
While Tron founder and HTX advisor Justin Sun assured users that their assets were safe and the exchange would cover the losses, the crypto trading platform left an on-chain message for the hacker, giving them seven days to accept a 5% white hat bounty and return the funds or face the wrath of the law as their identity had been uncovered.
Here’s What Experts Are Saying
HTX’s hack is another one on the rapidly growing list of centralized platforms that have been compromised this year, although for a smaller amount. The incident once again solidified the age-old belief in the crypto community – not your keys, not your coins.
Brandon Brown, CEO and co-founder of personal wallet protection tool FairSide, believes the hack emphasizes the importance of self-custody methods, which entail users holding and directly controlling their private keys and assets. He added that such solutions would reduce customers’ reliance on third-party platforms, thereby mitigating the risks of single points of failure.
Brown further explained that centralized exchanges (CEXs) play crucial roles in the crypto ecosystem by providing liquidity and user-friendly interfaces. However, they are “juicy targets” for malicious actors because of their large pools of funds.
Zak Taher, CEO of MultiBank, a financial broker that offers trading tools and infrastructure, buttressed Brown’s point, stating that the incident at HTX highlights the importance of robust and stringent security protocols and internal policies.
Damaging Crypto’s Reputation
Furthermore, Louis Bellet, CEO at layer-3 decentralized broker creating platform Yellow Network, told CryptoPotato that CEXs managing their private keys provides a central point of vulnerability worsened by multiple personnel having access to the keys. However, decentralized protocols isolate the impact of such events.
Fraser Edwards, CEO at permissionless data network cheqd, opined that the unending hack incidents are damaging the reputation of crypto. He explained that the case with HTX is another example in the industry where there is tension between user experience and security, like in cases where exchanges have to maintain hot wallets for easy movement of funds and stay exposed to hacks in the process.