This European Crypto Exchange Was Just Hacked for $5 Million

Nick Chong

Last Updated: September 9, 2020 3:00 am

2 mins read

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In the first crypto exchange hack of this bull market, a European crypto exchange was hacked for around $5 million. Only the exchange’s “hot” wallets were compromised per their report.

A hot wallet is a cryptocurrency wallet connected to the Internet. For exchange, hot wallets are often used to enable fast withdrawal of one’s holdings, as the opposing “cold” wallets are meant to take some effort to access.

Crypto Exchange Hacked For $5 Million

Announced on Twitter and in Telegram, six of the European crypto exchange ETERBASE’s hot wallets were recently compromised. These wallets are for the exchange’s Ethereum (and ERC-20 tokens), Tron, Tezos, Bitcoin, Algorand, and XRP.

According to The Block, at least $5 million worth of cryptocurrency was withdrawn from the hot wallets.

NewsBTC’s analysis of the blockchain data indicates that many of the Ethereum tokens the hacker(s) obtained have been dumped for ETH.

This is not the only crypto hack that has taken place over recent months.

As reported by NewsBTC, a long-time Bitcoin investor saw 1,400 BTC swiped from his wallet in an exploit. The pseudonymous investor explained on GitHub that he was prompted to update his Electrum Wallet with a false alert and accepted the update, which triggered the transfer of funds.

The Rise of Decentralized Exchanges

An interesting trend to watch is the ongoing flight of liquidity and crypto users from centralized exchanges to decentralized exchanges.

There’s a non-zero chance that during this market cycle, centralized exchange hacks won’t be as prominent due to growth in decentralized exchange.

For one, Ethereum’s Uniswap has been regularly processing over 100,000 trades a day worth hundreds of millions of dollars. The volume figure, at least, is higher than that of many leading exchanges.

The liquidity on some decentralized exchange crypto pairs, too, far eclipse traditional exchanges. Curve.fi allows one to trade stablecoins with extremely low slippage and fees, even if you’re looking at a transaction worth millions of dollars.

Of course, centralized exchanges always need to exist in some capacity, or else fiat capital will not enter the digital asset markets.

But again, with the rise of crypto being traded on-chain as opposed to off-chain, centralized exchange hacks may decrease in severity.