In the first crypto exchange hack of this bull market, a European crypto exchange was hacked for about $ 5 million. According to their report, only the exchange’s ‘hot’ wallets were compromised.
A hot wallet is a cryptocurrency wallet that is connected to the internet. For exchanges, hot wallets are often used to allow for a quick withdrawal of someone’s holdings as the opposing ‘cold’ wallets are meant to take some effort to access.
- 1 Crypto Exchange Hacked for $ 5 Million
- 2 The emergence of decentralized exchanges
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Crypto Exchange Hacked for $ 5 Million
Announced on Twitter and in Telegram, six of the hot wallets of the European crypto exchange ETERBASE have recently been compromised. These wallets are for the exchange’s Ethereum (and ERC-20 tokens), Tron, Tezos, Bitcoin, Algorand and XRP.
At least $ 5 million worth of cryptocurrency has been withdrawn from the hot wallets, according to The Block.
NewsBTC’s analysis of the blockchain data indicates that many of the Ethereum tokens obtained by the hacker (s) have been dumped for ETH.
This isn’t the only crypto hack that has happened in the last few months.
As reported by NewsBTC, a longtime Bitcoin investor saw 1,400 BTC swept from his wallet during an exploit. The pseudonymous investor explained on GitHub that he was asked to update his Electrum wallet with a false warning and accepted the update, which triggered the transfer of funds.
The emergence of decentralized exchanges
An interesting trend to observe is the continued flight of liquidity and crypto users from centralized exchanges to decentralized exchanges.
There is a non-zero chance that centralized exchange hacks will not be as prominent during this market cycle due to the growth in decentralized exchange.
First, Ethereum’s Uniswap regularly processes more than 100,000 transactions per day worth hundreds of millions of dollars. The volume figure is in any case higher than that of many leading exchanges.
The liquidity on some of the exchange’s decentralized crypto pairs also far eclipses traditional exchanges. Curve.fi allows anyone to trade stablecoins with extremely low slippage and fees, even if you consider a trade worth millions of dollars.
Of course, centralized exchanges must always exist or fiat capital will not enter the digital asset markets.
But then again, with the rise of crypto trading on-chain rather than off-chain, centralized exchange hacks could diminish in severity.
Related reading: These 3 trends suggest BTC is poised to bounce after a drop of $ 1,000
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