On the 13th of January users of New Zeland based Cryptopia had started to experience technical difficulties and the exchange went on to announce via twitter that they were carrying out an unscheduled maintenance to sort out the issue.
It was yesterday night then the exchange announced it had “suffered a security breach which resulted in significant losses.” The company is the leading digital asset exchange in New Zealand with over two million users.
Cryptopia went on to say they had alerted the authorities including the NZ police and high tech crimes unit.
Who are Cryptopia?
There are two key things that make Cryptopia unique. Number one is that it has a large number of cryptocurrencies listed on its platform. The exchange currently has over 550 cryptocurrencies listed on its platform, as opposed to the norm of 200. This makes it a good place to buy low-cap coins (Electroneum,Tron and Reddcoin) that would rarely be found on other exchanges.
The second is the peer-to-peer exchange. This means that transactions made via Cryptopia do not go through the exchange you can exchange with other users directly.
The latest in a long line of hacks
It was recently reported that Etherum classic has been subject to a 51% hack. Interestingly it seems the attackers had a change of heart and have returned one hundred thousand dollars of the funds back. It is not clear of the intentions of the attackers. The exchange Gate.io have said, “If the attacker didn’t run it for profit, he might be a white hacker who wanted to remind people the risks in blockchain consensus and hashing power security.”
Elsewhere, there has been some good news on the exchange front. In Japan, it seems that Coincheck will be back in the market after regulators have cleared the exchange to come back to the industry, joining the exclusive lists of regulated exchanges in Japan, a year after it was hacked.
In order to get the license, Coincheck is mandated to introduce Know-Your-Customer (KYC) procedures as well as multiple passwords before money transfers can be effected on its platform. Also, the platform is not allowed to make offerings of anonymous virtual coins (including Dash and Monero), as the FSA alleges that these coins are often used by criminals to cover some of their illegal activities.
It was back in January 2018, in an attack that resulted in the theft of NEM and some other altcoins, with a total value of around $530 million. In the wake of the attack, the company had to suspend operations for months and work with the police to track down how and who stole the tokens to ensure proper compensation to the affected customers.
Where do we go from here?
It seems many of the exchanges have stepped up their game when it comes to security. They are actively employing hackers to see if they can break down security walls. The South Korean government only approved 7 out of 21 exchanges so it seems the worlds most active crypto nations are looking to secure the industry.