Cryptocurrency exchanges have been a very important aspect to the community and economy. Exchanges have helped millions of people transact with their favorite assets whether it was a buying or selling facilitation. According to CoinMarketCap the total market value is pushing $300,000,000,000. In an enormous market like this, one might think simple standards like high liquidity, internal audits, fair fees, and good customer support is an industry practice. However, it all started in 2014 with the rising prices of Bitcoin, when greed and thoughtlessness took place.
February 2014, exchange giant Mt. Gox files for bankruptcy stating that 850,000 bitcoins were stolen and are unable to pay back creditors. Fraud and severe mismanagement of funds belonging to the users of the platform clouded over Mt. Gox. To this day people are still waiting to receive their liquidation share from the disaster.
Fast forwarding to January 2015 the exchange Bitstamp which was a direct competitor of Mt. Gox, was hacked resulting in a loss of over $5,000,000. The amount stolen was far less than Mt. Gox however, the way in which the coins were stolen was outrageous. Bitstamp executives were phished with concert tickets and other fake email requests.
August 2016 Bitfinex made history with the second largest cryptocurrency exchange hack with over $70,000,000 stolen. There are many critics with this hack since accounts that were not affected directly got 36% of their funds automatically exchanged for BFX tokens. (BFX tokens were held in place for Bitfinex to payback customers ) The unique hack was able to occur with the help of the mismanagement in their multisignature wallet which was blindly signed when API keys were hacked to send off 120,000 bitcoins.
July 2017 exchange site BTC-E was fined $100,000,000 while the owner Alexander Vinnik was arrested on the accusation of laundering more than $4,000,000,000. Some reports also suggested that 95% of ransomware attacks were sifting coins through BTC-E. Alexander Vinnik was named in connection to the Mt. Gox hack which resulted in a net loss of $2.2B. Users on the platform were given a choice after a few weeks to either take a native token ( similar to that of Bitfinex) or take a large percentage loss of their tokens.
Most of these hacks and exploits occurred because private keys were misplaced and carelessly managed. Exchanges should be a safe place for users to transact, and if cryptocurrency is to go mainstream this is essential. Cryptocurrency technology has allowed companies to avoid a lot of traditional financial barriers, however traditional business strategies in security and internal control should not go ignored.
A New Standard Has Been Created
Which is why in 2018 Oodlebit, the next generation exchange that aims to take care of funds and keep security a priority was created. In a market where private keys have been misplaced, and executives have fallen for email phishing attempts, we are confident to take customer experiences to the next level. Customers will be given top support as deserved since a community without users isn’t one at all.
Get In Touch
In an ongoing effort to expand and grow our exchange we are giving away 50 OODL coins with 60 days of free trading to the first 30,000 users. Visit https://www.oodlebit.com to learn more about our amazing offers.