With all of the security breaches drama going on in the crypto space, I guess this is a very valid question to ask – who is next?
Recent news of crypto exchanges being hacked and some exchanges disappearing into thin air has called for concern on the security level of digital asset exchanges. The last straw that broke the camel’s (one of many camels’) back is the sudden collapse of the second largest crypto exchange in Poland, Bitmarket.
The Polish virtual exchange announced on July 8 on its website, that it was forced to shut down due to loss of liquidity. The message reads:
“Dear Users, We regret to inform you that due to the loss of liquidity, since 08/07/2019, Bitmarket.pl/net was forced to cease its operations. We will inform you about further steps.”
At the time of compiling this article, we are yet unsure of the cause of “loss of liquidity” as stated in the message on Bitmarket’s website.
Users who tried to log in as usual were greeted with this disturbing news, throwing them into utter confusion as to what has happened? What happens next? Are the digital coins safe? Worse, Bitmarket is yet to give any tangible response besides the loss of liquidity and that they will inform users about further steps. Not much to go on, if you ask me.
A crypto exchange with an average daily trading volume of about $850,000 (which earned it the second-largest crypto exchange in Poland) shutting down all of a sudden due to loss of liquidity without prior warning or attack raises a ton of questions.
What Went Wrong to the Crypto Exchange?
That is yet another question we are waiting to get an answer to. For now, we can’t categorically say what went wrong. However, a Reddit user who goes by the name OdoBanks disclosed that the cryptocurrency exchange was most likely hacked.
According to OdoBanks, the crypto exchange enforced some stringent security rules just before the news of its shut down. Some of the stringent rules, which OdoBanks referred to as “red flags” include the compulsory change of users API keys, Bitmarket compelling users to change their passwords, and halting withdrawals for some new know your customer (KYC) requirements such as submitting a scanned ID (both sides), a photo of the users face while holding the submitted ID and lastly a note to confirm you are using the crypto exchange to buy Bitcoin as an investment for yourself.
These security measures were not there until lately and coming just before a sudden shut down indicates that the firm was hacked or there was an attempted hack. But I will go with the first guess because an attempted hack is not enough to liquidate a crypto exchange. But what do I know!
Which Crypto Exchange Is Next?
Bitmarket is just one of many crypto exchanges which have fallen a victim to a hack – that is if a hack is actually the problem. Several virtual asset exchanges have been victimized or threatened with a hack scare. Just in 2019, there has been two hack attacks on Bitrue. This goes to show how important it is for more security measures to be added to crypto exchanges. A quick reevaluation of security features is what many virtual currency exchanges need at this time.