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Cryptocurrencies Get Hacked

by Brent Kirkpatrick

(Date Published: .)

Cybersecurity risks are not priced into the cryptocurrency market.

Over $20 million was stolen on the Ethereum exchange, and over $40 million in altcoins were stolen this weekend on the Coinrail exchange in Korea. This marks a second significant hack of Ethereum ($55 million was stolen in 2016). These hacks follow other hacks of exchanges (Coincheck lost $400 million and Tether lost $31 million).

The security vulnerabilities exploited by hackers appear to be weaknesses in the exchange client software. In the Coinrail heist, tokens were taken from Coinrail users, not from the companies that issued the tokens. In the Ethereum heist, wallets were raided when investors left port 8545 open on their Geth clients.

cartoon: coins, bank computers, and worm

Security researches at NetLab run a honeypot on port 8545. They track IP addresses that scan for open Ethereum wallets. "There are quite a few IPs scanning heavily on this port now," according to a tweet from NetLab.

There are options for securing your client wallets while still being able to participate in currency exchanges. For example, you can keep most of your tokens in a cold wallet (unavailable to the exchange), and transfer tokens to a wallet available to the exchange when you have a transaction.

Contact Intrepid Net Computing if you want to discuss your options for security.

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