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Cyber security incidents make the headlines every few days, and cryptocurrency exchanges are no stranger to infiltrations perpetuated by opportunistic cybercriminals.
The growing popularity of cryptocurrency and digital assets in recent years has drawn attention from cybercriminals seeking to profit from the theft of digital assets, and cryptocurrency’s value to criminals will continue to grow as the world embraces blockchain technology and its application potential for various industries.
The year 2018 was a record-breaking one for cryptocurrency exchange hacks, where digital assets worth a grand total of US$1 billion were stolen from centralized cryptocurrency exchanges. According to Ciphertrace’s Cryptocurrency Anti-Money Laundering Report 2018, some US$927 million was stolen during the first three quarters of 2018 from cryptocurrency exchanges alone.
Notable cases of theft from centralized exchanges include:
– 2014: US$450 million (mainly Bitcoin) from Japanese exchange MtGox, resulting in its overnight collapse
– 2018: US$534 million from Japanese exchange Coincheck
– 2018: US$146 million from Italian exchange BitGrail, with an estimated 230,000 users suffering losses
– 2020: US$218 million from KuCoin by suspected North Korean hackers
A major contributor to security breaches on centralized exchanges is the open-source technology systems are built on. While open source technology greatly benefits from collective community intelligence, its flip side is having vulnerabilities in its code discovered by ill-intent parties.
Hackers also commonly employ on-chain attacks and advanced persistent threats (APT), distributed denial-of-service (DDos) attacks and phishing attacks to gain unauthorized access for cybercrime activity.
Exchanges have thus had to step up their game to ensure their users and assets are protected from malicious activity, and Huobi Global is no exception. The centralized exchange prides itself on having had no major security incidents stemming from network attacks or hacking incidents, since it started operations nine years ago.
While the level of digital assets stolen from cryptocurrency exchanges has decreased since 2018 with the rise of DeFi networks and their popularity as targets for cybercriminals, the need for robust security on the part of centralized exchanges is no less crucial.
Huobi Global has implemented a comprehensive security system to safeguard its business against professional hacker organizations, covering blockchain security, wallet management, user asset protection and application security.
In addition to installing anti-DDOS systems and a professional distributed architecture, Huobi Global keeps 98% of its digital assets in multi-signature cold wallets, which function as vault for less-frequently traded assets. Unlike conventional crypto wallets, multi-signature cold wallets require more than one private key to authorize a transaction. Such wallets add an extra layer of securit, as multiple key holders have to be accountable to one another.
Huobi Global currently has a total of 15 private key controllers, ensuring platform funds are secured and will not be compromised due to the actions of a single party. Multiple security processes are in place to ensure the availability of private keys at Huobi Global.In addition, self-developed security hardware ensures the robustness of storage at the centralized exchange.
Huobi Global employs an independent and professional security team with extensive experience in blockchain and wallet security. The security team has been deeply involved in the digital asset industry for many years and has formulated a series of detection and countermeasures to mitigate attacks on the centralized exchange’s systems.
The security of each operational process at Huobi Global is assured through strict processes, many of which can only be carried out with the authority of more than one party.
Cybercriminals are constantly finding new ways to steal digital assets, and finding an exchange that operates with security at the core is of paramount importance to all cryptocurrency holders. Huobi Global’s values are deeply aligned with its goal of gaining users’ trust for the long term. A single security incident could compromise hard-earned trust that has been built up over the years.
“We believe in the cryptocurrency industry, and it is thus necessary to carry out systematic protection at multiple levels, and make targeted adjustments according to the changing security landscape,” says Huobi Global Co-Founder Du Jun. “Users should always choose an exchange that operates with industry-leading security standards to mitigate the possibility of asset losses.”