Cybersecurity and Cryptocurrency: Lessons Learned from One of the Biggest Digital Heists in Taiwan
CHIAYI, Taiwan, Sept. 7, 2021 /PRNewswire/ -- As the use of cryptocurrency continues to increase worldwide, so does the risk of becoming a target of hackers that want to take advantage of these valuable assets. The economics of hacking also suggests that hackers will continue to gravitate towards digital currencies as these currencies continue to increase in value and become even more prevalent in our daily lives.
In early July, hackers perpetrated what is likely the biggest digital theft in the history of decentralized finance in Taiwan, stealing about US$3.1 million worth of the cryptocurrency Tether from an antique dealer named Liu Kun-Hung.
According to Taiwan's Criminal Investigation Bureau (CIB), even though investigators have already identified the hacker's internet protocol address, this case is still far from being solved and the stolen money still remains unrecovered. Basically speaking, tracking the work of hackers is often challenging since they can easily eliminate their virtual footprints. More importantly, cryptocurrencies are still unregulated by a government entity or central bank, so when a cryptocurrency account is hacked, investors do not have any real legal recourse.
Yet, in this case, Liu does want to highlight some lessons he has learned from this loss and share some key points involved in protecting a cryptocurrency investment. After all, he believes, you shouldn't wait for someone else to protect you—you should take steps to protect yourself first.
First of all, Liu's two online wallets were hacked. Generally speaking, both the police and cybersecurity experts suggest that offline or physical wallets should be used to store the bulk of one's cryptocurrency, keeping only a limited amount in an online wallet. This hybrid approach minimizes losses, even if a person's digital account is hacked.
According to the police's initial probe, it appeared that the hackers stole Liu's password and vital account information by hacking into the cell phone(s) of Liu and/or his employees. Since most people with a digital wallet use a mobile app to manage their wallet, hackers are often keen to target people by using mobile phishing campaigns or mobile apps that have the hidden ability to steal login credentials. Therefore, cryptocurrency investors are strongly encouraged to install the latest antivirus software on their smartphones and tablets.
In addition, in this case, Liu was not the only person who had access to Liu's own two digital accounts. Truth be told, vital information should never be shared with others, especially the private key that is used to validate that the person sending or receiving the digital coins is the owner of the wallet being used. What's more, this private key should be carefully safeguarded. One of the safest ways to do so is to store the private key in "cold storage." This simply means keeping the private key completely offline by printing out the key and removing all digital traces of it. With cold storage, the risk of an attack is greatly diminished.
Finally, cryptocurrency investors should avoid using wallets hosted by a provider. Using wallets hosted by a provider means that you are allowing the provider to store your private key on their servers—and this means your private key is totally out of your control. The downsides are numerous—the provider's servers might get hacked; the provider might go out of business; the provider's infrastructure might be taken over; etc. Instead, choose a USB-based hardware wallet. This way, the most vital information is kept offline and is much safer in comparison to other methods.
Contact: George Hu 886-919563599 318078@email4pr.com
SOURCE Liu Kun-Hung
