Since the collapse of FTX, investors in the cryptocurrency industry have been very touchy and watchful. The Coinsquare hack announced on November 19 could have dealt a blow to the confidence of its customers, but the exchange seems to have handled this security breach well. No theft of cryptocurrency is announced. On the other hand, Coinsquare remains on alert. Indeed, hackers had access to many personal data of customers. The exchange used a simple, but life-saving technique to secure its customers’ assets.
Coinsquare Hack: Customer Data Exposed
Coinsquare is one of the largest cryptocurrency exchanges in Canada. On November 19, he announced a unauthorized access to their system by unknown actors. The announcement was made through the company’s Twitter account. Right away, Coinsquare went out of business to initiate emergency maintenance. Remember that on this exchange, you can buy, hold and sell cryptocurrencies. This incident comes in a context where the crypto industry has learned of the bankruptcy of FTX. This exchange, which managed billions of dollars in cryptocurrency assets, collapsed overnight. However, Coinsquare’s quick response helped reassure its customers, despite its sudden unavailability.
Concretely, Coinsquare announces a possible theft of customer data such as: names, physical and electronic addresses, account balances, transaction history, addresses of public wallets and dates of birth. No cryptocurrency was stolen, either from customers or from the company. Client passwords were not stolen either. However, this does not guarantee that the hackers will not be able to access their accounts or steal their cryptocurrency.
First, stolen information can be used for phishing. This hacking technique tricks a user into revealing their password. In a second step, a brute force attack on the Coinsquare system will break the weakest passwords.
How Coinsquare protected its customers’ cryptocurrencies
Coinsquare kept its customers’ funds on a physical wallet. This type of wallet offers the best security. But it is not often used to store customer data. The reason is simple, it is best used for long term storage. Coinsquare has also ensured that customer assets are not leveraged for its operations. Nansen, a leader in blockchain analytics, guaranteed the safety of the funds. Service has now been fully restored to the platform.
Conclusion
Coinsquare therefore bravely recovered from this hack, despite the fact that a future risk remains. Other platforms have seen worse. Binance, for example, lost around $100 million last October following a piracy. Nevertheless, one is entitled to wonder why cryptocurrency exchanges are so vulnerable to hacks.
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