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Bitpoint hacking scandal strengthens case for better protection for users

A cryptocurrency security expert is calling for action after another hacking scandal saw $32m stolen from an exchange. Japan-based Bitpoint was reportedly forced to halt trading after irregular activity was spotted on Thursday.

It is not the first time crypto exchange users have lost their money, with Binance being targeted by hackers earlier this year and QuadrigaCX collapsing after the death of its CEO meant no one was able to access the stored funds.

Justin Short, co-founder of MetaVault – a fully insured digital asset custodian – said crypto users deserve better protection.

He said:

“This kind of event simply should not be happening at this stage of the industry’s development and exchanges have too much to gain from continuing to bend the rules.

“This kind of news embarrasses professionals in this industry and delays mainstream adoption and utility. It simply should not be happening.

“Exchanges don’t make their money from storing tokens, their interest is in customers trading them so, sometimes, the security of the tokens they hold is not a top priority.”

Mr Short believes further controversies are avoidable – and crypto users have a role to play in affecting change.

He said:

“The good news is that this problem is, right now, completely solvable. However, customers need to start loudly demanding solutions by voting with their wallets.

“Exchanges should strongly consider using independent cold storage solutions that are fully insured. Not only does this almost completely eradicate the risk of tokens going missing but also, in the unlikely event that it does happen, it means customers are guaranteed to get their funds back – unlike with so-called ‘self-insured’ solutions.

“If crypto is to become truly mainstream, then controversies involving millions of dollars vanishing clearly need to stop. It’s time for the industry to get serious.”

About MetaVault

MetaVault IOM is part of the MetaVault Group, offering best-in-class digital asset custody and protection from US$5M to US$100M and over, available with bundled insurance underwritten by A rated London-based insurers. The MetaVault Group supports Bitcoin, Ethereum, Litecoin, Bitcoin Cash and many ERC20-based tokens.

 

Jung Min-seo

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