The case for closer regulation of digital asset trading gains ground after losses of US$1.73 billion so far this year For the many cryptocurrency holders who care about security, the year 2018 is shaping up to be a nerve-racking one. The reported losses from cryptocurrency hacks and scams in the first half have already surpassed US$1.73 billion, or more than half of the total recorded losses since 2011, according to Crypto Aware, a community-focused advocacy initiative.
Of these, 36 per cent represented losses from exchange hacking. The biggest exchange hack so far also took place this year.
In January, more than 500 million units of the NEM token, then valued at US$547 million, were stolen from Japanese crypto-exchange Coincheck, upstaging the US$480 million loss suffered in 2014 by users of Mt. Gox, at that point the world’s biggest crypto-exchange, when 800,000 bitcoin were stolen.
The hack triggered a series of legal claims and the crypto-exchange’s insolvency. Similar to traditional stock exchanges, a centralised crypto-exchange is run by an organisation that oversees its operations, maintenance and security, and grants users access to the trading platform for a fee.
A centralised exchange connects buyers and sellers of cryptocurrencies, or cryptocurrencies to fiat money transactions. And while blockchain is well known as the decentralised ledger technology that underpins various cryptocurrencies, ironically, today transactions involving these digital tokens on centralised exchanges often do not happen on blockchain. Read more from scmp.com…
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