As previously reported, KuCoin has announced that they experienced a hack which caused millions of dollars in losses.
A hacker, or a group of hackers, gained access to the hot wallet of this exchange platform and stole over $ 150 million in Bitcoin, Ethereum and other cryptocurrencies.
Funds held in hot wallets are used by this exchange to provide the necessary liquidity for users to carry out daily operations.
Of course, the announcement sparked fear among investors who were at risk of losing their funds and also being unable to withdraw their cryptocurrency during an investigation by the KuCoin security team. This has an impact on the price of KCS (Kucoin Coin), which immediately drops significantly, -6.23%.
Even so, BTC and ETH prices are still stable in response to this exciting news!
This is none other than KuCoin's swift efforts to solve this problem by quickly taking precautions by contacting several other exchange partners to block stolen funds.
In response to this hack, Binance assured that they would block any funds received from any address associated with the hack.
Tether directly froze 13 million USDT related to the hack and temporarily blocked addresses with 20 million as a precaution.
Other exchanges are committed to tracking funds, and Silent Notary said they will burn all stolen SNTR tokens and replace them with new ones.
Indirectly, this has shown that it is still important to have a certain level of centralization in a protocol, something that is so crucial for the security of crypto funds.
Centralization does carry the risk of censorship, but users have peace of mind that an entity will safeguard its interests. In fact, if a problem occurs, in this case, the victim can go to court to demand compensation.
It is the same as a few weeks ago, where people mistakenly transferred BNB and asked the CEO of Binance to return the coins.
If it were truly decentralized, people or investors who kept coins on Kucoin would disappear, just like people who transferred BNB. And, nobody takes care of this.
This is why many consider Bitcoin ETF approval and service creation to institutional investors to be essential to the entire crypto ecosystem.
Not because the money will come in, but because the confidence investors will know that their money is safe which is of course the main reason.
Does this fledgling thing in crypto really need centralization for better security, given the many hacks that are difficult to solve due to the nature of decentralization? What do you think?