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After the KuCoin Hack, What’s the Best Way to Secure Your Crypto Assets? 

After the KuCoin Hack, What’s the Best Way to Secure Your Crypto Assets? 

Quick Take

3 minute read

  • Hacks and exit scams have become so commonplace in the cryptocurrency sector that many participants don’t even pay much attention to the smaller incidents.
  • In an industry where over $13 billion has gone missing in over 325 separate events, it’s difficult for people to keep track.

Hacks and exit scams have become so commonplace in the cryptocurrency sector that many participants don’t even pay much attention to the smaller incidents. In an industry where over $13 billion has gone missing in over 325 separate events, it’s difficult for people to keep track. But the recent hack of KuCoin, one of the world’s most popular digital asset exchanges, was eye-opening even for the most jaded corners of the crypto community. 

Details of the event started to emerge early in the morning of Saturday, September 26, with the exchange itself confirming via Twitter and the company blog that it had detected unauthorized withdrawals, “which contained few parts of our total assets holdings (sic).”

At the time of going to press, much about the hack remains unclear. Nobody is yet quite sure how it happened, or even how much the hackers took. Initial estimates suggested it was around $150 million, which later increased to about $200 million. A few days after the attack, The Block researcher Larry Cermak suggested that it could be as much as $280 million. 

If so, this would make it the third-biggest hack in history - eclipsed only by Coincheck

 in 2018 and the hit on Mt.Gox in 2014. The critical difference is that both of those incidents involved the theft of a single asset. In the case of Coincheck, the attackers stole NEM, and Mt.Gox involved the theft of Bitcoin. One thing we do know about the KuCoin attack is that the hackers took many different assets, including BTC, ETH, XRP, and, if Cermak’s calculations are correct, nearly $150m in ERC-20 tokens. 

A Vacuum for Speculation

The absence of information inevitably leads to speculation. Despite KuCoin’s CEO Johnny Lyu publishing two post-incident AMAs and assuring his firm would cover the losses, there are still many questions about what happened with KuCoin over the weekend. 

For example, were all these funds held in a single hot wallet or multiple hot wallets? The former would imply a severe lack of consideration for security. But if the latter is true, it would mean hackers managed to obtain more than one set of private keys, perhaps implying insider involvement. 

However, for anyone who lost out due to the KuCoin hack and has spent the intervening period kicking themselves for having trusted the exchange with their funds, there can be only one question. What’s the best way to keep cryptocurrency safe? 

In light of the KuCoin incident, which wasn’t even the only exchange hack in September, it’s fair to say that keeping funds on an unregulated exchange is risky. In 2020, the two safest ways to keep your crypto funds safe are to use a custodial service or a cold storage wallet. 

Custodial Services

A custodial service involves using a trusted party to hold your cryptocurrencies on your behalf. For the average retail cryptocurrency investor, then Skrill is one such option. The company is a longstanding payment firm, founded in London but now with global operations. It’s part of the PaySafe Group, which also runs Neteller. 

Skrill is a reliable option for those new to cryptocurrencies, or less proficient with some of the more technical concepts of using digital assets. Users can access cryptocurrency buy, sell, and trading services via the same user interface as for payments. Cryptocurrency purchases are very straightforward using Skrill fiat balances, and users can send crypto payments securely to other Skrill users. 

The company partners with trusted exchanges and custody providers to keep customer’s funds safe. As an established financial services provider, it knows what to look for in its partners, and because it isn’t holding customers funds on loosely secured hot or cold wallets, it’s not a target for hackers. 

High net worth individuals also tend to use custody providers for their crypto investments, as it takes the risk and headache out of having to manage their own private keys. 

Cold Storage

Cold storage wallets are a little more challenging to set up than using a custody provider. However, they are another highly secure means of storing your funds. Cold storage, or hardware wallets, keep your funds offline, meaning they’re generally less vulnerable than hot wallets that exist on internet-connected devices. 

The two biggest providers of cold storage wallets are Trezor and Ledger. Unfortunately, neither has been proven to be 100% secure against attacks. In January 2020, researchers at Kraken Security Labs found a way of extracting the seed key in under fifteen minutes. Later in the year, developer Mo Nokhbeh found a different kind of vulnerability affecting Ledger devices that would allow a hacker to steal Bitcoin when transferring altcoins, such as BCH or LTC, forked from Bitcoin. 

A newer cold storage wallet manufacturer, NGRAVE, claims to have developed the “world’s most secure hardware wallet” that never needs to connect to an internet-enabled device. However, the device is currently only available on pre-order and costs a hefty €350 (around $400.)

A hack on the scale of the one that KuCoin experienced is bound to leave crypto users with questions about fund security. However, like everything else involved with digital assets, finding the best means of keeping your crypto safe involves doing your research. Look for the best provider - either an established custody service or a proven self-custody solution - with a reputation for reliability and trustworthiness. 

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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North Carolina residents to soon have access to Binance.US services

North Carolina residents to soon have access to Binance.US services

Quick take

1 minute read

  • Binance.US is getting ready to launch its services available to North Carolina residence. 
  • Binance published a statement earlier this month Catherine Coley saying that the digital asset marketplace is now available for residents in North Carolina.

Binance.US is getting ready to launch its services available to North Carolina residents. The subsidiary of the major crypto platform Binance published a statement earlier this month on the 12th of November to CT with the CEO, Catherine Coley saying that the digital asset marketplace is now available for residents in North Carolina.

This would allow them to buy, trade and earn cryptocurrency.

“[North Carolina] is a state that has been involved in building the banking industry and evolving technology,” stated Coley.

It is also worth noting that North Carolina is home to the research triangle park. For those that don’t know, this is a well-known high tech research and development company that includes Cisco systems as well as other consulting companies in relation to blockchain.

In regards to this, they further say:

“Research Triangle Park and the robust school systems in the state have it positioned to meaningfully impact the blockchain industry [...] the state can begin to build more companies that have easy access now to cryptocurrencies.”

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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IRS crackdown on Coinbase users who are dodging their tax

IRS crackdown on Coinbase users who are dodging their tax

Quick take

1 minute read

  • The tax office of David W Klasing has just issued a public release morning the United State IRS is cracking down seriously with users on the Coinbase platform.
  • The dual licensed tax lawyers employed at the company say that they have been tracking an increase in IRS enforcement activity against users on the platform you are not complying with their requirements for tax and reports.

A specialised Californian tax company, the tax office of David W Klasing has recently issued a public release stating the United States internal revenue service (IRS) is cracking down seriously with users on the Coinbase platform.

The dual-licensed tax lawyers employed at the company say that they have been tracking an increase in IRS enforcement activity against users on the platform who are not complying with their requirements for tax and reports.

The company has heeded a warning saying people who are not paying the tax on the platform “end up facing serious civil and criminal trouble down the line”. They further say:

“If you have failed to report holding Bitcoin or other virtual currencies on your past returns or filed an incomplete or misleading picture of your cryptocurrency holdings, the time to act to correct this is now. Once an audit or criminal tax investigation has begun, it will be too late to amend your returns or take advantage of a voluntary disclosure program.”

A transparency report was released by the exchange earlier this year in October which was highlighted by the law company saying that it should “serve as a major wake-up call“ to users of the exchange.

For those that don’t know, this report clearly indicated that both the IRS and its criminal investigation unit were filing information requests with the platform.

The uptick in the enforcement activity against Coinbase uses from the IRS on those who don’t their taxes would appear to confirm that the exchange is cooperating closely with federal authorities in the United States as the company has further said:

“This data [in the October report] makes it clear that the IRS is requesting information from Coinbase for the express purpose of checking it against its own taxpayer data and looking for discrepancies where holdings on Coinbase have not been reported on taxpayers’ returns.”



For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Crypto exchanges boom in Cuba during the pandemic

Crypto exchanges boom in Cuba during the pandemic

Quick take

1 minute read

  • Cryptocurrency has been going at an immense rate over the course of 2020. 
  • With the coronavirus pandemic in full swing and the economic crisis that came as a result still ongoing, crypto is looking as a tasty alternative for mini all over the world.

Cryptocurrency has been going at an immense rate over the course of 2020. With the coronavirus pandemic in full swing and the economic crisis that came as a result still ongoing, crypto is looking as a tasty alternative for many all over the world.

Cuba is one such country that has been seeing a spike in its crypto activities over the course of this year. This comes as there is an absence of related regulation in the country according to senior executives at local crypto companies.

Earlier this month, the nation recorded a massive spike in Google queries relating to bitcoin which suggested an increase in crypto activity in the nation.

Speaking to CT, a local crypto exchange Bitremesas said that the platform has been slowly but surely growing over the course of this year and has seen a noticeable influx in its user activity in recent times. The creator of the exchange, Erich Garcia said “By now, the use of the service is increasing at 200% every month.” 

Mario Mazzola, another founder of a different local exchange known as Qbita, said:

“Bitcoin usage and volume in Cuba is exploding right now.”

Cryptocurrency regulations in Cuba are next to none. They are completely deregulated according to local enthusiasts. Some say that they are neither legal nor illegal but the government in Cuba has favourably looked to the industry in the past.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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84% of lost funds on the KuCoin exchange now recovered according to CEO

84% of lost funds on the KuCoin exchange now recovered according to CEO

Quick Take

1 minute read

  • CEO of KuCoin exchange confirms 84% of lost assets have been recovered.
  • The exchange was hacked earlier this year in September.

After losing $280 million in a malicious attack earlier this year in September, the KuCoin crypto exchange finally recovered a “majority“ of the funds.

The co-founder founder and chief executive officer of the platform, Johnny Lyu published an announcement earlier this month on the 11th of November saying that the platform has recovered 84% of the stolen assets in crypto.

On top of this, he went on to say that the recovery process has involved “on chain tracking, contract upgrade and judicial recovery“.

Before we finish though, it is worth saying that we aren’t financial advisors and this is not financial advice. Please do your own research before investing in a cryptocurrency.

It will be interesting to see how this plays out however, it is good news that so much of the lost funds have been recovered.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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