Will This Hack Sink the New Exchange?
Getting hacked is a constant risk when you operate a cryptocurrency exchange. Many if not most known exchanges have gone through some form of cyber security attack in an attempt to steal cryptocurrencies. This includes Mt. Gox in 2014, Bitfinex which suffered a hack in 2016, and Binance which was breached in 2019.
While hacks usually cause the temporary suspension of trading and some financial damages, sometimes it causes the closure of an exchange. This was the case with both Mt. Gox and Cryptopia.
Earlier today, a relatively new exchange Altsbit reported a catastrophic hack. They have taken to Twitter to announce that their hot wallet has been breached. Nearly all of their BTC, ETH, ARRR and VRSC holdings have been reported to have been stolen. Only a small amount of their holdings, are considered safe at this time and the majority of that seems to be Komodo (KMD).
Dear users,â Altsbit (@altsbit) February 6, 2020
Unfortunately we have to notify you with the fact that our exchange was hacked during the night and almost all funds from BTC, ETH, ARRR and VRSC were stolen.
A small part of the funds are safe on cold wallets.
Altsbit is a relatively new exchange based in Italy. It was previously known as DigitalPrice but it went through a name change to Altsbit to avoid confusion with a cryptocurrency bearing the same name. The exchange operated under its new name Altsbit for only roughly five months until the hack earlier today.
A review of Altsbit from several weeks ago oddly made note of Altsbit's lax security and low liquidity and volume. In an almost prophetic move the review gave its security aspects an "F" rating.
Seeing that this is a new exchange with low trading volume and limited clientele, there is the possibility that this hack could cause the closure of Altsbits. Time will tell if Altsbit could weather the storm.
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Written by Jonathan Ganor
Writer & cryptocurrency aficionado