KuCoin, a major Asian crypto exchange platform, has been the victim of a hack in which $150 million in crypto was stolen, as BeInCrypto reported.
KuCoin assured its users that any stolen funds will be covered by its insurance.
The Hack Highlighted by Ledger for Self-Promotion
Ledger called out the KuCoin hack in a tweet, singling it out as the fourth biggest crypto exchange hack ever. The hardware wallet manufacturer encouraged its followers to avoid storing assets on exchange wallets.
#Kucoin hack is the fourth crypto exchange biggest hack ever!
Coincheck – $534 M
MtGox – $460 M
BiitGrail – $196 M
Kucoin – $150 M
— Ledger (@Ledger) September 26, 2020
Ledger is one of the industry’s most popular hardware wallet providers, but the company itself hasn’t had a stellar year.
In July, the company revealed that sensitive customer information was leaked. The security breach exposed users’ contact information and order details including about 1 million email addresses. The company maintained that users’ crypto assets are “safe” and “have never been in peril.” Still the crypto community was quick to call Ledger out on the hypocrisy, reminding the exchange about the leak of sensitive customer information.
Since you talk about security now…
Are you going to commit to NOT store online the identity of your customers to prevent what happened few months ago with the identities leaked from Your site?
If you legally need to store them, do it offline
— David Miller (@CryptoDavid_) September 26, 2020
One user mentioned that they weren’t informed of the data leak:
I was not informed of the data theft. why? I also wanted to buy a ledger X …. but after this problem I thought about it.
(@Triskellx) September 26, 2020
Hot and Cold Wallet Vulnerabilities
The KuCoin hack incident highlighted the vulnerabilities of hot wallet storage. Many of the high-profile exchange hacks have involved a breach of a platform’s hot wallet storage.
This raises the question of safe storage. Skeptics of hardware wallets say that wallets on exchanges are easy to manage and the responsibility of security is not on the user but on the exchange, which could result in fewer losses overall.
I’m betting more people are loosing their ledger or paper paper passwords than their cex accounts get’s hacked.
— 𝚃 ø 𝚖𝚖 y
𝚂𝚝𝚛 ø 𝚖𝚗𝚎 r (@strxmner) September 26, 2020
Certainly, hardware/cold wallets are considered safer methods of storing digital assets; however, the recent breach in the customer contact database shows that there are risks associated with cold wallets as well.