With the fervor surrounding the new year done and dusted, a stark reality has once again emerged, one that has sent ripples across the global market. According to Chainalys’ most recent year-in-review, 2024 witnessed a staggering $2.2 billion in stolen assets, representing a concerning 21.07% increase from the previous year’s figures.
This uptick in criminal activity was largely attributed to a rise in hacking incidents, with 303 reported cases compared to 282 in 2023. However, perhaps most concerning was the growing influence of state-sponsored attacks, particularly from North Korean hackers responsible for an astonishing 61% of all stolen funds, amounting to $1.34 billion across 47 incidents.
(L) Number of hacks vs value lost (R) Funds stolen by type of attack (source: Chainalysis)
Moreover, the report highlighted that peripheral issues — such as DeFi platform vulnerabilities, private key compromises, and fraudulent investment schemes — also played a major role in investors’ hard-earned assets being lost to bad actors. To this point, during Q1 2024 alone, DeFi thefts accounted for 60% of all crypto heists, while private key compromises were responsible for 43.8% of stolen assets, thus showcasing the rapidly evolving nature of security challenges facing the industry.
Fortifying existing exchange security protocols
In response to these mounting threats, leading cryptocurrency exchanges seem to have implemented comprehensive security frameworks combining cutting-edge technologies with proven security practices.
For instance, platforms have deployed multi-signature wallet systems while simultaneously maintaining the majority of their user’s assets in cold storage solutions — thus keeping them physically disconnected from the internet. These cold storage solutions are often complemented by institutional-grade custody services and substantial insurance coverage, providing an additional layer of protection.
Lastly, over the past few years, the integration of artificial intelligence (AI) and machine learning (ML) services into the security frameworks of different exchanges has been a game changer — enabling real-time monitoring of suspicious activities and automatic flagging of potentially fraudulent transactions.
If that wasn’t enough, the use of advanced encryption technologies, regular security audits, and partnerships with specialized blockchain security firms (such as Certik, Halborn, Hacken, etc) have become standard practice among most reputable exchanges, thereby creating a robust defense backline in a world replete with cyber threats.
Building trust in a fraud-ridden ecosystem
For individual crypto traders and investors, the foundation of their account security should ideally commence by implementing strong authentication measures and maintaining vigilant security practices. This includes using unique, complex passwords, enabling two-factor authentication, and regularly monitoring account activity for any suspicious transactions.
In this context, VALR has presented itself as a one-stop crypto platform offering users a highly secure, regulated entity that is committed to keeping their funds safe while following local regulations. This unwavering commitment is best evidenced by its successful funding round, which saw the firm raise $55 million in equity from industry giants like Pantera Capital and Coinbase Ventures.
VALR’s security-first approach has been instrumental in its remarkable growth trajectory, with the platform recently celebrating a milestone of one million users – representing a 100% increase in just twelve months. The exchange’s ability to have attracted over 1,100 institutional and corporate clients has further helped cement its status as a forerunner within the industry.
Moreover, VALR’s expansion beyond its South African roots, with more than 25% of its user base now originating from international markets, has showcased its burgeoning global appeal, especially in regions like Africa, Europe, MENA, and Asia. To this point, the exchange recently secured both the Category I and II crypto asset service provider (CASP) license from South Africa’s Financial Sector Conduct Authority (FSCA) as well as in Poland.
Not only that, reports suggest that the company is in the process of pursuing additional licenses in Dubai and Mauritius as well. Lastly, back in November of last year, the exchange launched the world’s first Bitcoin and USDT perpetual futures pairs against the South African Rand — thereby showcasing its ability to innovate while adhering to stringent security standards.
Looking towards the future
Despite the cryptocurrency market being plagued with a host of security breaches and scams over the past decade, entities like VALR are setting new standards for security and regulatory compliance, helping build a more equitable and trustworthy crypto ecosystem where investors of all pocket sizes can make their entry without any fear of losing their funds.
The post A Look At How Exchanges And Investors Are Navigating The Crypto Scam Landscape appeared first on CoinGape.
