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$139M BXH Exchange Hack: How to Keep Your Cryptocurrency Safe
They often say that history repeats itself. That sure seems to be the case with cryptocurrency. It seems like week after week exchange after exchange is hacked and still people continue to believe in these exchanges and put their money in them.
The number one way to prevent yourself from becoming the victim of the next cryptocurrency hack or scam coin is through education. When you educate yourself about cryptocurrency you are able to keep the criminals at bay and keep your cryptocurrency safe.
Wonder how this works? Well keep reading as we cover the $139 million BXH exchange hack as well as all the ways you can protect your cryptocurrency from future hackers..
At the end of October 2021, the BXH decentralized exchange was hacked, and the hacker was able to get away with over $139 million in funds. Immediately after the hack, BXH employed an outside security company to investigate what happened. What they found would shock the company as well as token holders.
Turns out, the hack was an inside job, meaning it was performed using an administrator key. While it can be easy and quick to blame the CEO, he isn’t necessarily the one who performed the hack.
What it does mean however is that someone who was on the administrative staff either gave out their key, or used a key given to them for malicious purposes. There is a possibility that the hacker first broke into the computer of an admin and stole the key—which isn’t that far-fetched with modern fraud tactics of sending phishing emails. It’s possible that a high ranking official of BXH happened to click the wrong link which resulted in a scam. He also could have inadvertently set up a virus on the actual BXH website—there is no way to know for sure.
The investigators were also able to find out that the hack came from the country of China, which is a bit suspicious considering most of BXH’s staff are from China. However, there are millions of other people in the country so it could easily be one of them as well. Supposedly BXH got the Chinese government involved, which is a little strange considering they are anti-cryptocurrency.
Either way, BXH stated that they would pay the users out for their lost money if they are unable to find the perpetrator of the crime. They also put a $1 million bounty for anyone who could provide information which would lead them to the hacker.
It is now April 2022 and there have been no major updates regarding the BXH hack. The third party security company, Bit Jungle, has been investigating for months to no avail—which only means one thing, it was an inside job. Although, during their investigation, they couldn’t narrow down their suspicions to a single team member.
It’s unclear which admin hacked the system and stole the money, but this certainly puts BXH in a bad spot as they must repay the money as they promised the users they would. As of April 2022, they are still investigating the hack with the help of the Chines Authorities and have yet to send users a single penny.
A heist like the BXH one may be disheartening, especially because those who have had their money stolen have yet to see a single dime returned. And this isn’t the first time, as the Mt Gox hack in 2014 quickly angered investors and caused the company to go bankrupt. They swore they would return every penny, but to this date it hasn’t happened yet.
Using a centralized exchange like Coinbase can help keep your cryptocurrency from being stolen. Major CEFI exchanges like Coinbase have enough money to pay for the best security companies and technological defenses. Additionally, if they are somehow hacked, they will likely be able to repay every cent that is stolen from users.
While this is the easy answer, it isn’t the best one, as keeping your currency on a centralized exchange has problems of its own—mainly the US government taking a peek at your earnings and charging you taxes when they can. So while you are safer with Coinbase that a DEFI exchange like BXH, know that this isn’t a fix all solution.
The number one way to keep your money from hackers is to store it not on an exchange. No matter what you do in this life, exchanges are always susceptible to hacks, and keeping your money on one (even if it is Coinbase) means it is vulnerable to hackers. Instead, keep your cryptocurrency offline.
There are two options for this, a software wallet which is stored on your computer, or a hardware wallet. A hardware wallet is slightly better, simply because it is completely separate from your computer and cannot be hacked at all. The only problem with hardware wallets is that you can lose the seed and lose access to your money.
The software wallet on the other hand, may be saved on your computer in an offline function, but it is still software and is still able to be hacked. BUT if you lose your password, there will be customer support to help you out. So you have to weigh the costs and benefits of these two options before you decide to transfer your money one way or the other.
Before you put your money anywhere, whether that is in a cryptocurrency or on a DEFI exchange, you need to investigate the project you are interested in and be sure it is a project you believe in and that it is owned by people you trust. Just because a company is public doesn’t mean they won’t end up running off with your money (just as BXH investors!)
Either way, even if you research a project, you definitely don’t want to store your hard earned cash on any exchange—as BXH isn’t the only exchange to get hacked in 2021. Instead, no matter what you do, keep your money offline in a wallet (hardware or software) that you trust as this is the only way to keep your crypto safe. And remember, write your seed down somewhere safe!