Bitpoint, a Japan-based cryptocurrency exchange, suspended all trading this week following the announcement of a hack, to the tune of 3.5 billion yen, or $32.5 million.
Bloomberg report states that 2.5 billion yen belonged to customers. The tokens stolen include BTC, BCH, and XRP.
Japan’s Financial Services Agency (FSA) recently determined that cryptocurrency exchanges should self-regulate, strengthening internal security protocols and standards. Prior to that, the country banned hot wallet use amongst the 19 cryptocurrency exchanges registered in the nation.
These efforts were primarily in response to the 2018 Coincheck hack. This theft, the largest in cryptocurrency history, involved over $500 million in losses.
It seems unlikely that the same Russian group that infected the PCs of Coincheck employees with viruses are behind this latest Bitpoint hack. $32 million is a pittance compared to $500 million. However, no details regarding the attack origins have been released.
What we do know is that hacking is a problem that isn’t going away.
Most people like to refer to the 2014 discovery that Mt. Gox, the world’s leading cryptocurrency exchange at the time, had been hacked of 850,000 Bitcoin as the first major cryptocurrency exchange hack.
In reality, Mt. Gox suffered its first hack in 2011, the first year it was operational as a cryptocurrency exchange.
In other words, hacking has been around since the beginning of time in the cryptocurrency world.
The cryptocurrency economy is now at a place where it is large enough to have caught the attention of major central banks globally in a big way. Regulation of cryptocurrency exchanges is rampant. It varies heavily from country to country, ranging from outright bans, to overt suggestions to be very afraid when investing in crypto.
Hacking isn’t the only problem facing cryptocurrency exchanges. By now QuadrigaCX is practically a household name due to an unfortunate loss of over $100 million in cryptocurrency.
However, this loss was not the result of a hack. Quadriga founder and CEO Gerald Cotten passed away unexpectedly at the age of 30 on a humanitarian trip to India.
We should all be grieving the tragic death of a young entrepreneur, a philanthropist and a newlywed. His loss will be felt through the cryptocurrency community and charitable foundations alike.
Instead, people are fuming, because the death of Cotton rendered inaccessible the funds of everyone who traded on QuadrigaCX. Nobody else had the encrypted passcodes.
It isn’t exactly Cotton’s fault. Dying of a chronic disease like Crohn’s at the age of 30 as Cotton supposedly did is an extreme worst-case scenario medically. However, it brought to light an enormous issue in the exchange and trading space. Unexpected problems, death, for example, keep cropping up. As a result, people keep losing money.
Yet here we are in 2019, with over 250 exchangesin the market. It is a number that continues to grow month over month.
Why are exchange developers so committed to growth, new launches, and ultimately, a successful cryptocurrency exchange ecosystem, free of hackers and other such drama?
First and foremost, exchanges are ridiculously profitable. With careful management, exchanges are profitable even in bear markets, when everyone else is bleeding money. It is a pretty good reason to keep trying against all odds.
Crypto pioneers also keep coming up with new and innovative ideas. A couple of years ago, ideas like these were labeled “disruptive.” Now, it is just good money management through the introduction of incredibly powerful tools.
BQT, for example, is an up and coming cryptocurrency exchange with a socially conscious foundation. The exchange seeks to build a culture of collaboration, between investors and exchanges alike.
This premise, adopted because the BQT founders recognize and respect the symbiotic relationship between every player on the crypto field, has never actually been voiced by an exchange. BQT is the first.
In addition to its vision and robust offerings, including a hedge trading platform, BQT has an educational component to its platform. Called BQT University, the platform is for anyone who wants to learn more about the blockchain economy.
Whether “graduates” use their education for business opportunities, personal investments, or simply to quell curiosity, is up to them. Regardless, it is another means through which BQT is giving back to the community.
Other new offerings are less altruistic, but equally exciting. DX.Exchange just announced that investors will soon have the ability to purchase NASDAQ-listed stocks on its platform using cryptocurrency.
Although it doesn’t officially open until 2020, the Estonian-based newcomer already has 500K pre-signed users on its exchange. With this announcement, not only these existing investors, but also some pretty heavy hitters in fiat and cryptocurrency alike have amazing opportunities to take advantage of this powerful bridge between traditional investments and cryptocurrency.
The market continues to explode with new technology and investment growth potential, and front-runners like BQT and DX.Exchange are leading the charge.