By CCN.com: Bitcoin bull and the CEO of digital assets merchant bank Galaxy Digital, Michael Novogratz, has warned that the hacking suffered by the world’s largest cryptocurrency exchange Binance could invite more investor scrutiny. In Novogratz’s view, this can only be bad for the industry.
Binance Loses 7074 Bitcoins
The crypto bull was reacting to Binance’s statement that the attackers had targeted the exchange’s bitcoin hot wallet. The exchange lost about 2 percent of its total bitcoin holdings.
2 percent is a lot when your the worlds largest crypto exchange. No way to spin this as good. Will certainly bring more scrutiny from regulators. https://t.co/uqFH3tStCp
— Michael Novogratz (@novogratz) May 7, 2019
The security breach occurred on Tuesday. The entire 7,074 bitcoins stored on the exchange’s BTC hot wallet were stolen.
Using a variety of techniques including viruses and phishing, the hackers were able to obtain privileged information. This included user API keys and 2FA codes, per a statement released by the exchange.
Bitcoin Bull Novogratz Is Right – Look at What Happened in Japan
Among the countries with high cryptocurrency adoption rates, Japan has suffered more than its fair share of crypto exchange hackings. As evidence of what Novogratz is afraid of, last year’s hacking of Coincheck unsurprisingly resulted in increased scrutiny and actions by Japan’s regulator Financial Services Agency (FSA).
For instance, the FSA’s Virtual Currency Exchange Services Study Group has proposed several measures aimed at protecting investors. This includes requiring cryptocurrency exchange to maintain reimbursement funds. These funds would be used to compensate users in case their digital assets were stolen from a hot wallet.
Specifically, the group proposed that the fund contain the same digital assets as those that were deposited by users. This means that for every bitcoin deposited online, the…