Mercator research has documented the security of the Bitcoin network but we also identified that all operations outside of that Bitcoin network are by nature very insecure – especially wallets, exchanges and ATM implementations. Put another way the Bitcoin network is in essence the bank and everything else is a mattress stuffed with money.
Ledger, a secure hardware wallet provider, was hacked in July and lost 272,000 customer records. So while the crypto remains safe in a protected thumb drive, the individual customers are now the targets for a large amount of criminal activity. All of the stolen customer records were dumped onto RaidForum this month and the customers now face a tidal wave of social engineering hacks which have already begun.
In a more recent hack, this month the U.K.-based cryptocurrency exchange Exmo “detected suspicious withdrawal activity”. Oops, there goes crypto valued at more than $10 million. But to calm everyone it released this statement:
“The affected hot wallets comprise near 5% of the total assets. Let us stress that all the assets in the cold wallets are safe,” Exmo wrote in the security incident report.”
The Exchange added:
“Most importantly, we want to assure you that if any user fund is affected by this incident, it will be covered completely by Exmo.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
