Why We can't blame Binance entirely for the hack!

The world of cryptocurrency is in a state of shock and rightly so. One of the biggest and most reputed exchange suffered a security breach that led to the hacking and subsequent withdrawal of a huge amount of BTC. The exchange in question is Taiwan based Binance, which announced on Tuesday, i.e, May 7, 2019, that 7000 Bitcoin, amounting to $40 million was withdrawn through a single transaction.

Several methods were practiced by the hackers which included phishing and viruses to execute this “large scale security breach”, as mentioned by the organization. The company also mentioned that they were alerted of this hack when the security alarms went off as soon as the withdrawal took place. The exchange has suspended any withdrawal or deposit requests post this incident.

Luckily for the users, the exchange will be using the SAFU fund to cover this incident in full which implies that no user will suffer any loss. However, this incident has instilled a sense of fear and insecurity in the hearts of the entire crypto community. There is a lingering question in every mind i.e. if an exchange as big and as renowned as Binance can get hacked, then where are their funds actually safe?

Is there any platform that keeps the digital assets of users truly safe? For those who just intend to hold their cryptocurrency, they have cold wallets to keep their funds secure and away from hackers. However, users who are more interested in trading have no other option but to keep their funds in an exchange, hoping that their exchange won’t be the next target of hackers.

In the wake of this scenario, there are a few things that a user can take care of himself to protect his digital currency from being snatched away by such malicious entities.

1. It is to be noted that only those API keys were hacked by the hackers which didn’t have the Whitelabel Withdrawal Address set. Which means a user has the option of setting up a particular wallet address in which he would withdraw his funds if he ever does. No other wallet address will be authorized for this withdrawal.
2. Secondly, the user also has the option of setting up IP Whitelist which means a user can restrict access of API to trusted IP addresses only. As a user, you have the option to secure your funds by setting up these parameters which ensure that only you are able to withdraw your funds from specific addresses.
3. Change your API key as frequently as possible. This ensures that before a hacker hacks your API, you will have a new API leaving the old one useless for the hacker to execute any malicious deed.

In the backdrop of ‘crypto-doubting’ that has ensued since the Binance hack, I as a cryptocurrency user understand the potential and innocence of these cryptocurrencies in this scenario. There are many people questioning the safety of cryptocurrency and if we can truly trust them. However, we need to understand that it is not the cryptocurrency which is unsafe if we don’t take care of storing them safely.

Just like fiat currency, if the security features of the platform are not in place or if you haven’t taken care of the security parameters recommended by the bank, you will most likely lose your money. Being a crypto user, it is your responsibility to keep your crypto safe. If you don’t tick off all the security parameters then no exchange can keep your assets safe for you.