Ledger Calls Out KuCoin After Hack as Wallet Users Cry Foul

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In Brief
  • Ledger used the KuCoin hack to tout its hardware wallets.

  • The wallet manufacturer was plagued by its own security issues in July.

  • Both hot and cold wallets have their vulnerabilities when it comes to security.

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Following the KuCoin hack, hardware wallet manufacturer Ledger went on to advocate for safer storage on its own wallets.

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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.

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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.

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.

One user mentioned that they weren’t informed of the data leak:

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.

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.

 

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After finishing his studies in International Business Administration at the Frankfurt School of Finance & Management, Christian started working at a real estate development company. Upon discovering Bitcoin and the cryptocurrency space, he switched his focus to learn, analyze and write about all things digital.

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