Yesterday it was reported that Zaif, a major Japanese cryptocurrency exchange, was hacked, resulting in a loss of 6.7 billion yen, including 5,966 bitcoins (about $60 million). The incident, which occurred last week, is the latest in a string of breaches occurring in Asia this year and comes less than eight months after the Coincheck hack.
Theft of crypto assets, whether minor or extraordinarily detrimental, blatantly shows the vulnerabilities of crypto exchanges and points to the larger issue of the security or lack thereof protecting exchanges.
Exchange platforms, such as Mt. Gox, Bitfinex and Bitstamp, are not security companies. Essentially, they are online platforms serving as digital marketplaces where crypto traders can buy and sell cryptocurrencies. When they leave the private keys providing access to their assets on an exchange platform, crypto investors are essentially entrusting a third party – the exchange – to enforce security measures to keep private keys safe against hackers.
And while some exchanges provide a basic level of security, many aren’t equipped to prevent malicious breaches and safeguard investors’ private keys to the extent of a security company.
While exchanges are tightening security measures, hackers are becoming more sophisticated every day, leaving investors responsible to take security into their own hands.
Luckily, solutions exist to keep your private keys secure, such as hardware wallets. Ledger has developed hardware wallet technology offering state-of-the-art levels of security for the private keys providing access to your crypto assets through a secure element – a chip designed specifically to resist highly skilled attackers and used notably in passports and credit cards, and a proprietary OS (Operating System) designed specifically to protect crypto assets.
Breaches such as this Zaif incident are complex and involve the smartest hackers in the world. To combat them, crypto asset owners need the most sophisticated security technology available. Ledger hardware wallets offer the best path forward for investors to safeguard their crypto assets and protect against attacks.