By Drew M. Smith
Digital currency took a huge hit last week as reports of a large-scale breach was reported in Korea. Their cyber currency exchange reported that cyber thieves stole up to billions of dollars, causing the exchange, Coinrail to fall 7%.
This report caused millions of other exchanged to lose their market value and caused temporary stoppages at effected markets. The current losses are currently estimated at $30 Billion with more loses expected.1
This was not the first market hacked, leading many to call for increased scrutiny into the unregulated industry. The U.S for example has called for an inquiry into futures trading, the lifeblood of exchanges like this.
The fear is warranted as more commerce is done online. Many groups are skeptical of the new currency and warn they shouldn’t replace real currency. A report by the Swiss based Bank of International Settlements warned that the increase in demand for cryptocurrency will create needs for larger data banks and more energy to store them. "Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded," it said, adding that "means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value."2 In essence, if something like a hack can bring down an exchange, the amount of data loss could be irrecoverable.
With such a large hack of monetary value, this creates the fear that the security of such markets is inadequate. This naturally worries other money markets as they would be as vulnerable to theft as cybercurrency. Be sure to keep your cyber policy up to date in the event something like this happens.
Insight into Cyber Policies: https://www.axisins.com/products/cyber-liability-privacy-network-security/why-cyber-liability/
Why Hackers Like Bitcoin: https://www.axisins.com/ransoming-online-the-new-kidnap-and-ransom/