Crypto.com, one of the worlds’ largest cryptocurrency exchanges has reportedly suffered a hack, with at least $15 million worth of Ethereum stolen. The hack is the latest in a series (opens in new tab) of security branches that have affected crypto currency exchanges and it further damages confidence in the nascent cryptocurrency sphere.
The issues came to light when users began reporting that their funds were missing, even those with two factor authorization enabled. Crypto.com tweeted that it was pausing withdrawals after it received complaints from users.
These issues led PeckShield, a blockchain security firm to look at the blockchain data. It discovered that at least 4600 Eth is being laundered through Tornado Cash, which is an Ethereum privacy protocol that breaks the link between source and destination addresses.
The @cryptocom loss is about $15M with at least 4.6K ETHs and half of them are currently being washed via @TornadoCash https://t.co/PUl6IrB3cp https://t.co/6SVKvk8PLf pic.twitter.com/XN9nmT857jJanuary 18, 2022
The hack is noteworthy as Crypto.com isn’t an obscure exchange, but one of the largest of all, with a 24hr volume of over $3 billion which is around that of Coinbase. Interestingly, Crypto.com hasn’t officially confirmed a hack (opens in new tab). To its credit, the company has promised that users’ funds are safe. The company is investigating internally and is expected to release a report or detailed statement in the coming days. It’s also taking steps to harden its security infrastructure.
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But has the horse already bolted? Once the trust of users is lost, it can be hard to regain. There’s an old saying among crypto currency enthusiasts: “Not your keys? Not your coins”. This means that your crypto is at the mercy of the exchange you hold your funds on. Unless you’re buying, selling or trading, its always best to keep your private keys safely offline and away from potential hackers. Many of whom are probably state backed (opens in new tab).
Crypto.com has seen its profile raised through a series of expensive sponsorship deals involving Formula One, European football teams and even stadium naming rights. This is hardly the kind of PR black eye the company needs.
At a time when the crypto market is trying to move out of the wild west and integrate itself with the wider financial system, reports of hacks are not what the market needs. Sadly all too many people consider crytocurrencies to be a den of scammers and criminals. As an avid cryto enthusiast myself, I wonder if they're not wrong.