Crypto exchange hack: How analytics firms come to the rescue

Crypto exchange hack

Crypto exchange hack remains imminent in the crypto space with the existence of cryptocurrencies, exchange firms, and continuous development in computing. With advancements in computing, exchange firms remain at the mercy of hackers.

These firms, in case of a crypto exchange hack, get to find relief in the hands of security or other analytics firms who come to their aid after any hack attack. Security and analytics firms are the only hope for exchange firms in the hands of hackers who don’t stop trying to exploit unsuspecting exchange firms.

Last year, there were several reported cases of crypto exchange hack as even global and first-class exchange firms and wallet providers where not spared in the hands of these hackers. Malta-based Binance, the most popular exchange, and crypto wallet provider got hacked in 2019 alongside Bithumb and Cryptopia, other international crypto firms.

Recovery of all the stolen assets remains uncertain

Sometime in February 2020 too, bZx, a decentralized lending protocol, got hit by hackers twice with both attacks coming within that same week. The bZx attack prompted stakeholders in the crypto space on the need to improve their security.

However, all these crypto exchange hacks even after they have been made public and analytics’ firms are beginning to investigate them, recovery of all the stolen assets remains uncertain as they are issues yet to get addressed.

Crypto analytic firms mainly track hack cases after these cases have been made public by exchange firms as their role in investigating exchange firms could limit their operation. Philip Gradwell, Chainalysis’s Chief Economist, said that analytic firms help crypto exchanges track their hacked fund, their involvement in solving those cases usually is being limited by exchange firms.

He said in an exclusive interview that it depends on how well exchange firms cooperate with them as some exchange firms reach out to them whenever they get hacked. In some instances, analytics firms can trace stolen funds but cannot ascertain if these funds are already retrieved by the exchange firm that was hacked.

The chief economist said that firms in the case of crypto exchange hacks need to cooperate as analytics firms cannot be involved in any case of attack except they get called or if the hack is a made public.

Crypto exchange hack: Lazarus group attack strategy revealed

Earlier in January 2020, a group of North Korean hackers called Lazarus managed to steal a certain amount of crypto through messaging app Telegram.

Chainalysis got involved and began investigating without clearance from an authoritative body because the attack became a public one. Chainalysis, after its investigation, released a report revealing that the Lazarus movement got tracked after the attack.

The report noted that Lazarus in the hack used sophisticated phishing ploys, increased use of mixers and CoinJoin wallets, along with creating fake, but realistic trading bot website.

Featured Image by Pixabay

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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