There is a very clear reason why people say, do not store your crypto on the exchange. There have been numerous hacks all around the world and on every single exchange. The most notable hack is Mt. Gox where the crypto industry was changed forever.
Currently, there are still hacks and ransomware attacks going on all around the world. Earlier in 2019, the largest exchange in the world Binance, was even hacked for tens of millions of dollars in Bitcoin. Make sure to always store your assets offline in cold storage unless you are day trading.
As the hacks increase, companies like Marsh will become more relevant. They aim to bring exchanges and brokers to the insurance market. Currently, pricing these clients is still a challenge, but with continual data and exposure to the new market they will start to be accepted. Until this is a reality and every custodial solution has insurance, keep your assets and private keys safe.
From 2016, two Israelis have been hacking crypto users, exchanges, and promoting fake ICOs. The men, Eli Gigi and Assaf Gigi, are brothers from Jerusalem, Israel. In the last week, they were arrested by a cyber unit of the Israeli police force for stealing crypto through an on going phishing scheme. The story was broke on a news outlet, Ynet, and described a net sum of over $100 million stolen in the past 3 years by the brothers. Apparently, the brothers were tied with the 2016 Bitfinex hack which amounted to $1.5 million dollars as well.
Recent news believes the amount to be smaller than the $100 million, but it seems we do not have an exact numbers yet.
The brothers have been stealing cryptocurrency by accessing traders’ wallets through long and persistent methods of social engineering and phishing. The brothers have many means to do this including:
- Staged crypto sites similar to fake ICO sales and Buy Bitcoin sites
- Targeting fake exchange customer services and fake crypto custodian solutions
- Telegram chats with fake offers and services
- Other forums like Reddit, Twitter, and social sites were used as well to lure in new investors
Basically, the traders would get drawn into this scam after a lengthy process of offers and compelling stories too good to be true. Once the person has entered in their private keys for storage, trading or exchange, their coins were gone. This is just a clear reminder to everyone in the market, never give away your private keys.