Posted on February 8, 2020 at 11:06 AM
Recent reports revealed that almost all the funds in the crypto-exchange platform, Altsbit, have been stolen by cybercriminals.
On Thursday, the Italian crypto-exchange announced on Twitter that its platform was the target of some cybercriminals, as almost all the funds in its custody were hacked and stolen.
According to the exchange, the hackers were able to infiltrate their platform and steal almost the funds, including VRSC, ARRR, ETH, and BTC. It said a small portion of the funds that were kept on cold wallets are still safe.
The criminals made away with 283,375 VRSC, and 1,066 tokens of KMD (Komodo) which amount to a combined total of $27,000. This is the latest setback in a series of attacks on crypto exchange firms which have impacted the cryptocurrency industry in recent months.
No confirmed reports of the nature of the attack
Altsbit did not disclose how the cybercriminals were able to breach its platform. However, the company has begun an investigation into the attack, and it’s hoping to uncover how the attack was perpetrated. Altsbit said it’s going to inform customers and users about any new developments regarding the attack.
Altsbit under fire in recent times
Altsbit described itself on its portal as “Your dependable cryptocurrency partner”. However, the company has been criticized by social media users on its operational methods and slack security protocols.
One of its customers, Tim Tayshum, wrote on Twitter recently that Altsbit is not meeting up to that mantra. He further said that Altsbit should take responsibility for its poor security protocols because it seems hackers are finding the platform an easy prey to attack.
With the past attacks on hot wallets, it should be obvious to companies that the best security protocol is to store most of their funds on the cold wallet while hot wallets should be used only for live execution flow, Tim reiterated.
Some other users are still not convinced that there had been an actual hack on Altsbit’s platform. Some of the users said the situation may not be as a result of an external hack, but a purposeful attempt by the exchange to steal investors’ money.
According to a user with the twitter handle, @Psyagnostic, the exchange may be playing a fast one on investors because he cannot accept the fact that hackers actually stole most of the company’s funds, even when many companies are now storing most of their funds on a cold wallet.
The user said any crypto exchange that keeps most of its investors’ funds in a hot wallet is inviting trouble. He further pointed out that it’s obvious that hot wallet storage is not safe for storing funds. Exchange companies are supposed to be aware of this, and he has not yet convinced the funds were actually stolen by external factors as the company claims.
Before the announcement, Altsbit’s exchange had its entire trading activity coming ARRR/BTC pair, with about $14.8 million trading volume. The company has a 24-hour trading time.
High Vulnerability of centralized trading platform
While reacting to the development, some proponents of the decentralized trading platform have once again frowned at the weakness of centralized trading platforms. But even with the vulnerability issue, most of the recorded trading volumes in the crypto market are made under centralized platforms.
User interfaces in decentralized platforms are usually very hard to navigate, which is the reason why many exchanges prefer the centralized platform.
But when it comes to the security levels in the decentralized platforms, it seems they are more equipped to wade off attackers as their protocols are a bit more difficult to crack.
Crypto exchange firms limiting hot wallet holdings
As hackers devise strategies to steal funds from crypto exchanges, many exchanges are now keeping most of their funds on the cold wallet because of its extreme level of security. If there is no internal breach, it’s usually very difficult for hackers to steal funds from cold wallets. According to security analysts, this storage method has vastly reduced the number of attacks over the past few years.