Why the exchange always attacks by the hackers?

Since the emergence of cryptocurrency, the related exchanges have been established in succession. And those exchanges with a significant amount of digital asset storage naturally become the attacking target of hackers.

There are two kinds of common attacks.

Attack the exchange to operate prices.

Hackers would maliciously create a booming flow to occupy the server of the exchange that leads to the unexpected malfunction and suspension of the exchange website, and other users would be unable to use the exchange. After creating an ideal price, hackers would buy-in in bulk to make profits on the price difference. Although such attacks do not represent that someone’s money has actually been stolen, it, however, resulted in a significant effect on the currency price.

For example, Binance Exchange was attached by hackers in March this year, which resulted in purchases of other competitive currency at a high price by multiple investors unwittingly. And it causes a material fluctuation within a short period of time, involving more than 20 kinds of currencies; and Binance had therefore suspended the transaction for a short time.

Hackers steal the private key to the wallet or discover the loophole of the exchange.

E-wallet private key is equivalent to the code to the e-wallet. Once the private key is stolen, hackers may transfer the assets in your account or receiver new assets.

In general, hackers steal the private key of wallet in the online exchange and transfer the money through blockchain system instead of decoding the algorithm of the cryptocurrency or the blockchain verification system.

In January this year, the Japanese exchange Coincheck had suffered from the most serious theft. Cryptocurrency with a value amounting to 56.8 billion Japanese Yen (approximately NT$15.68 billion) has been stolen overnight, and a total of 0.26 million users suffered from losses. Coincheck has compensated for the losses on its own. However, after the news was spread out, the market value of the New Economy Movement has declined 11%, and other cryptocurrency prices have suffered from the knock-off effect.

Therefore, within the entire system of blockchain, the unsafely results from the exchange itself and the e-wallet instead of the encrypted algorithm or blockchain. As such, choosing the exchange and e-wallet with care become the critical issue.

Although all the exchanges may have chances to be invaded by hackers, the importance attached to customer information by the exchange and the protection of the exchange may show the suitability of such the exchange regarding investment. Also, exchanges with more stringent requirements on such aspects may be more capable of protecting users’ assets.

Regarding the holders of cryptocurrency, except for e-wallet in the exchange, it is recommended to purchase the cold-storage wallet similar to the physical wallet, which adopts the off-line mode to save all the cryptocurrency. Transfer the money from the wallet to the exchange only when conducting a transaction. Although the cold-storage wallet is very safe, the holder shall be aware that only remembering the password may access the assets in the wallet.

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