Altsbit, cryptocurrency exchange platform, was hacked. All funds were stolen

Although security measures on cryptocurrency exchange platforms improved markedly over the last year, multiple cybersecurity incidents were reported during 2019, equating to losses of around $280 million USD.

Unfortunately for virtual asset enthusiasts, the trend seems to be repeating in 2020. The administrators of Altsbit, a newly created Italian-based crypto-exchange platform, revealed a hack that resulted in the theft of almost all of their Ethereum and Bitcoin funds. Administrators noted that the rest of the assets remain safe, as they were stored outside the network (a practice known as cold storage).

Altsbit official statement

“We are in the process of determining the amount of losses, as well as the method used by hackers. More details will be reported soon,” he mentions the platform’s Twitter account.

The main advantage of cryptocurrency use is its decentralized nature, although the use of exchange platforms eliminates that advantage almost entirely. In addition, various cybersecurity firms consider that, due to the centralized nature of these platforms, they become more attractive targets to hackers than individual users.

On the other hand, this incident is a wake-up call regarding the use of cryptocurrency storage with Internet connection (hot storage), as for many users this remains the most insecure alternative for the storage of virtual assets, especially due to the progress that cybercriminal groups have made.

In its annual report of cybercriminal activity in the cryptocurrency world, cybersecurity firm Chainalysis notes that, even as losses from theft decreased, the number of successful attacks against exchange platforms has shown a sustained increase.

Another trend during 2019 was the increase in the discovery of hot wallet vulnerabilities, which appears to be the reason for the incident on Altsbit and other previously compromised platforms, such as CoinBene, Upbit, Binance and more.

These kinds of incidents not only affect the economy of cryptocurrency users on a daily basis, but also affect the credibility of virtual assets, which still face little confidence from governments and conventional financial institutions, which are closed about the general adoption of cryptocurrencies.