Research firm KPMG has reported that since 2017, around $9.8 billion in crypto has been stolen through hacks. This report comes just days after two prominent exchanges suffered serious security breaches. The attacks were similar in nature and just hours apart.
It is thus clear that security has improved in recent times given none of the exchanges lost digital assets. It was also a wake-up call that security needs to continue improving to reduce losses.
Report: Institutional Investors Will not Risk Owning Crypto
The KPMG report shows that since 2017, hackers have made away with $9.8 billion. This is a huge amount with a great impact on the industry. This has over time mainly seen investors deterred from investing in the industry.
Additionally, during the hacks and theft, the market has been quick to drop. This is especially driven by panic and fear that the assets will be dumped, upsetting market prices.
Sal Ternullo, co-leader of KPMG notes, institutional investors cannot afford to risk buying digital assets if they can lose it in a mere couple of minutes.
“Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks, and bonds are,”
This remains one of the main reasons apart from volatility and regulation that hinders cryptocurrencies from going mainstream. But as shown recently, exchanges have proven to be adequate to the threats. OKex and Bitfinex recently had security breaches.
As the report notes, custodians have had to apply new methods and ensure that crypto assets are safe. The report states;
“enhance their methodologies to address the unique considerations for crypto-assets and related data-management challenges,”
Last week, two of the top exchanges in the industry, OKex, and Bitfinex suffered a major attack. In a span of 48 hours, the two exchanges suffered a DDoS attack.
This is one way that hackers can get access to exchanges and steal client assets. The two exchanges were able to stop the attacks and no client assets were stolen.
Prior to these, bZx was hacked and nearly one million in Ethereum (ETH) stolen.
These events have made it more than clear that hackers are continuing with their reign and exchanges and other custodians need to be up to the challenge if the industry is to continue growing.