As crypto prices skyrocket, cybercriminals target exchanges

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Each month, Zebpay, one of the oldest and largest cryptocurrency exchanges in the country, experiences two Distributed Denial of Service (DDoS) attacks when cybercriminals overload the exchange’s systems to disrupt service or look for a vulnerability in the platform’s defenses.

This is the simple part. Zebpay and other leading exchanges have found that the most serious security threat they face on a daily basis is sophisticated criminal frauds that combine social engineering and computer intrusion.

Criminals impersonate or impersonate social media in order to trick consumers into giving them access to their cryptocurrency wallets.

Not only investors but also cybercriminals appear to be flocking to cryptocurrency exchanges, which have seen the number of attacks doubled in recent months as cryptocurrencies have repeatedly hit all-time highs.

Fearing that future cryptocurrency regulations will make them responsible for investors’ losses, some of the world’s major exchanges are rushing to put in place a robust framework and systems and protocols to protect themselves from cyber attacks.

“ZebPay is constantly under attack. Whether it’s hackers trying to find problems that they can submit to our bug bounty program or infamous hackers trying to overload our systems to cause disruption and find loopholes in our defenses. As cryptocurrency becomes more common, the frequency of these attacks increases, which means we need to develop more sophisticated methods to identify and neutralize them quickly, ”said Sam Noble, CTO, ZebPay.

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CONNECTION Some exchanges have also contacted their legal experts to determine their liability for investor losses due to cyber attacks.

Even in cases where cybercriminals can hack customers’ crypto wallets.

“Currently, many crypto mining exchanges are vulnerable to cyber attacks because, in most cases, crypto assets are in wallets that do not have a strong security and password mechanism. is only a matter of time, before witnessing large-scale, targeted cyber attacks on exchanges and various platforms, and it will become crucial not only to keep a security framework in place, but even to determine the responsibility in such cases, ”said Siddharth Keskar, CEO of MZM Analytics, a legal firm.

According to sources, all major exchanges suffered at least two to three major attacks in the past month, and many investors lost their crypto holdings when their wallets were hacked.

Take Srikrishna Ramesh, aka Sriki, for example. According to media reports, Karnataka police arrested a 26-year-old man last week for hacking Indian exchanges and stealing bitcoins by “exploiting a bug”. Sriki informed the police that he spent all of his income – around Rs 3 lakh a day – on alcohol and stayed in fancy hotels.

According to industry sources, as the number of cryptocurrency exchanges in the country increases, most of them are vulnerable to cyber attacks. This comes at a time when cryptocurrency valuations in India have reached new highs. Cryptocurrencies hit the $ 10 billion mark, ET reported on November 1. Currently, around 10.5 crore, or 7.9% of Indians, have invested in cryptocurrencies through Indian exchanges, according to data compiled by CREBACO, a research firm.

Also earlier, Coinsecure, a cryptocurrency exchange, had filed an FIR with cyber police after more than 400 bitcoins were stolen.

“Security is an important aspect of our industry as we deal with user assets,” said Shashi Prakash Jha, legal and compliance manager at WazirX, a cryptocurrency exchange. Many exchanges are now even trying to block their systems. Most of our funds are stored in a cold room to prevent hacking, ”said Sharan Nair, commercial director of CoinSwitch, a cryptocurrency exchange.

Stock exchanges have extended their cyber protocols and systems to counter the most common attack methods, but vulnerabilities remain and hackers are finding new ways to target exchanges and investors.

“All of the wallets are based on customers’ mobile phones which don’t even have basic password protection. So imagine if someone just hacked into the phone or the user lost the phone. All of them. cryptocurrencies purchased will also be lost forever, ”he said. noted.

All cryptocurrency exchanges currently operate in a regulatory vacuum. A parliamentary standing finance committee headed by Jayant Sinha is examining a legal framework around cryptocurrency to regulate its trade. Many cryptocurrency exchange CEOs are meeting with the government on Monday and Tuesday to discuss the regulations.

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