Crypto exchange security is once again in the news after hackers breached KuCoin. But this shouldn’t surprise people as exchanges are vulnerable by design, according to Bybit CEO Ben Zhou.
Zhou told Cointelegraph that exchanges act as a single point of failure. As a centralized web application, exchanges are susceptible to the same security issues as all other websites.
Security becomes even more important as investors and traders are increasingly taking exchanges to task to protect funds.
The vast majority of crypto exchange servers and storage networks, Zhou said, keep digital currencies in hot wallets. If hot wallets are not properly protected, then this opens them up to theft. Zhou thinks that a cold wallet system is more secure since hot wallets are connected to the internet, making them more vulnerable to hacking. Cold wallets, on the other hand, are not connected online….